FINAL
REGULATORY ANALYSIS
ENVIRDtHENTAL AND ECONOMIC IMPACT STATENEMT
FOR THE 1982 AfJD 1983 MODEL YFAR
HIGH-ALTITUDE MOTOR VEHICLE EMISSION STANDARDS
ENVIROMENTAL PROTECTION AGENCY
OF ICE OF AIR, WISE AND RADIATION
OF ICE OF MOBILE SOURCE AIR POLLUTION CONTROL
OCTOBER 1980

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REGULATORY ANALYSIS AND ENVIRONMENTAL IMPACT OF
FINAL EMISSION REGULATIONS FOR 1982 and 1983
MODEL YEAR HIGH-ALTITUDE MOTOR VEHICLES
PREPARED BY
OFFICE OF MOBILE SOURCE AIR POLLUTION CONTROL
Michael P. Walsh, Deputy Assistant Administrator for
Mobile Source Air Pollution Control
APPROVED BY

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Important Notice
EPA has recently decided to delay the implementation of more
stringent low-altitude standards for light-duty trucks (LDTs) from
1983 to 1984. Since the high-altitude LDT standards are based on
the levels of the applicable low-altitude standards, this decision
also affects the stringency of the 1983 high-altitude standards.
This Regulatory Analysis was completed prior to the postponement;
therefore, the analyses presented here were done under the assump-
tion that LDTs would comply with more stringent standards in 1983.
Although the LDT high-altitude standards which were originally
proposed for 1982 will now also be applicable in 1983, the costs
and benefits of the high-altitude regulations are not significantly
reduced. For this reason, the conclusions contained in this
document remain valid and EPA has chosen not to revise the analyses
in order to prevent an unnecessary delay in promulgating the
interim high-altitude standards.

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Note
This document has been prepared in satisfaction of the Regula-
tory Analysis required by Executive Order 12044 and the Economic
Impact Assessment required by Section 317 of the amended Clean Air
Act. This document also contains an Environmental Impact Statement
for the Final Rulemaking Action.

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DEFINITION OF TERMS
Cars emit three major polluting gases - carbon monoxide
(CO), hydrocarbons (HC), and oxides of nitrogen (NOx).
Carbon monoxide is a colorless, odorless, poisonous gas
produced by the imcomplete burning of fuels. CO reduces the
oxygen available to the brain and body cells. In particular,
CO puts an extra burden on the heart and lungs.
Hydrocarbons and oxides of nitrogen react together in the
presence of sunlight to form photochemical oxidants (smog).
Ozone, the main constituent of photochemical smog causes irritation
to the eyes and mucuous membranes and aggravates existing respir-
atory illness.
Levels of carbon monoxide and oxidants in the atmosphere
above the minimum health standards can cause severe health problems
among children, the aged, and those with respiratory and heart
ailments.
Current EPA _1/ regulations, and proposed regulations, define
some key terms used in this analysis as follows:
Light-Duty Vehicle (LDV) - A passenger car or passenger
car derivative capable of seating 12 passengers or less.
Light-Duty Truck (LDT) - Any motor vehicle rated at 8,500
pounds Gross Vehicle Weight (GVW) or less, and under 6,000 pounds
vehicle curb weight which is designed primarily for the transpor-
tation of property, or for the transportation of people and has a
capacity of more than 12 people, or is available with special
features enabling off-street or off-highway operation and use.
Heavy-Duty Vehicle (HDV) - Any motor vehicle rated at more
than 8,500 pounds GVW or more than 6,000 pounds vehicle curb
weight.
Gross Vehicle Weight (GVW) - The loaded weight of a single
vehicle as assigned by the manufacturer.
Vehicle Curb Weight - Actual, or the manufacturer's estimated
weight of the vehicle ready for operation with all standard equip-
ment, the weight of fuel at nominal tank capacity, and the weight
of optional equipment.
High-Altitude - Any elevation over 1,219 meters (4,000
feet).
1_/ Code of Federal Regulations, Title 40, parts 86.007-2 and
86.079-2.

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High-Altitude Reference Point - An elevation of 1,620 meters
(5,040 feet) plus or minus 100 meters (330 feet), or equiva-
lent observed barometric test conditions of 82 kPa (24.2 inches
Hg), plus or minus 1 kPa (0.30 inches Hg).

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-v-
Table of Contents
Page
Important Notice 		i
Note		 . .	ii
Definition of Terms	iii
Table of Contents		v
I.	Introduction 		1
II.	Description of Industry 		6
III.	Air Quality Impact	
IV.	Economic Impact Analysis of the 1977
High-Altitude Emission Standards 		31
V.	Economic Impact Analysis of the 1982
and 1983 High-Altitude Emission Standards 		44
VI.	Cost Effectiveness	65
VII.	Alternatives	68

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CHAPTER I
INTRODUCTION
Conventionally carbureted motor vehicles will emit more grams
per mile of hydrocarbons (HC) and carbon monoxide (CO) at high
altitudes than at low altitudes. This phenomenon is attributable
to the lower air density found at high altitude as compared to
low altitude. A naturally aspirated gasoline-fueled engine draws
air through the carburetor. It is the volume of this air flow as
it passes through the venturi that regulates the flow of fuel.
Since the volume of air drawn through the carburetor remains about
the same at either low or high altitude, the flow of fuel remains
the same also. However, the mass of air is less per unit volume at
high altitudes than at low altitudes. Therefore, while the fuel
flow remains constant, the amount of oxygen decreases with increas-
ing altitude and a richer mixture results. In a rich mixture there
is not enough oxygen to fully burn the fuel so emissions of HC and
CO increase. Light-duty vehicles (LDVs) and light-duty trucks
(LDTs) typically emit at least 50% more HC and at least 100% more
CO at high altitudes than they do at low altitudes. These high
emission rates significantly add to air pollution in high-altitude
areas.
Public Opinion
A 1977 reportl/ to EPA, Region VIII found that to the Denver
region's residents "environmental problems taken collectively,
constitute the major impediment to the enjoyment of the good life
in Denver." The study found that:
Air Quality is generally perceived as Denver's most severe
environmental problem. Air and water pollution were indicated
as the major regional problems in opinion surveys conducted by
a Denver television station in the spring of 1973, and in the
survey conducted in late 1973 for the United Bank of Denver.2/
The latter survey found that 47% of the sampled population
believe air quality to be a major problem facing the Denver
region; younger respondents (25-34 years old) were more likely
than other age groups to hold this view, while members of
minority groups tended to find such problems as crime and the
cost of living more severe than environmental problems.
Nearly two-thirds of the respondents antiticipated further
deterioration in air quality over the succeeding five years.
The 1976 voter surveysj)/4/ also found air quality to be a
major issue. The Denver Urban Observatory survey found 81% of the
electorate believe air pollution was a very serious (52%), or
fairly serious (29%) problem; services for the elderly was the only
other issue of as great concern. The Denver Metropolitan Study
reported that a total of 57% of the voters find air pollution a
very serious problem, which was the highest level of concern
reported for any problem.

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These opinions of a random sample of residents/voters are
supported in EPA's workshop and newspaper questionnaires. Air
quality was the topic on which workshop participants were most
likely to express dissatisfaction with current environmental
programs, with over 77 percent expressing that view. As far as the
likely future effects of regional growth are concerned, 87 percent
of the citizens responding to a newspaper questionnaire found air
quality to have a very significant growth impact, and about 40%
found air quality to be the most important single influence on
growth.
B. 1977 High-Altitude Program
In recognition of the air pollution problems in high-altitude
areas, EPA promulgated regulations for 1977 which required all
dealerships in high-altitude counties to sell only those LDVs and
LDTs that were certified to meet the high-altitude standards.
These standards were 1.5 g/mi HC, 15 g/mi CO, and 2.0 g/mi NOx for
LDVs and 2.0 g/mi HC, 20 g/mi CO, and 3.1 g/mi NOx for LDTs (the
same as the 1977 low-altitude standards).
As a result of these regulations automobile and light truck
manufacturers did not certify approximately 50 percent of the
low-altitude configurations for high-altitude sale. They apparent-
ly projected that the added expense to develop and certify these
configurations for high-altitude would not be recovered due to the
small sales volume. High-altitude sales average about 3.5 percent
of national sales for LDVs and about 5.5 percent of national sales
for LDTs. However, the high-altitude sales as a percent of nation-
al sales are much less for some configurations. These lower
selling configurations were the ones not offered at high-altitude
during the 1977 model year.
This lack of model availability caused some dissatisfaction
among consumers and dealerships alike. High-altitude consumers
found that the dealership(s) in their area did not carry some of
the nationally advertised car models. Some of these dissatisfied
customers bought another model. However, some bought the model
they originally wanted from a low-altitude dealership, thus circum-
venting the intent of the 1977 model year regulation.
Dealerships complained that their customers were accusing
them of bait-and-switch tactics and that it was difficult to
explain to these customers the reasons why a nationally advertised
model was not available in high-altitude areas. Because of this,
the dealerships felt customer complaints increased and some sales
were lost.
Another problem the dealerships complained about was that
"dealer trades" suffered. Customers often prefer a certain color
and options package when they buy a new vehicle. Many dealers
trade with other dealers when they receive an order which can not
be filled with a vehicle on their lot. If the other dealer was

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located at low-altitude, then trading between the dealers may have
been preempted by the 1977 model year regulation.
A more detailed discussion of the problems and economic impact
of the 1977 regulations can be found in Chapter IV of this docu-
ment. Primarily because of the problems encountered by high-alti-
tude dealers, Congress addressed the 1977 model year regulations in
the Clean Air Act amendments of 1977.
C. Clean Air Act Amendments of 1977
With the passage of the Clean Air Act Amendments of 1977, the
Congress vacated the Environmental Protection Agency (EPA) high-
altitude regulations, but authorized EPA to reestablish high-
altitude requirements no sooner than the 1981 model year in Section
202(f) of the amended Clean Air Act. The Congress further provided
that any emission standards established in such regulations may not
require a percentage reduction in emissions from the high-altitude
baseline which exceeds the comparable percentage reduction in
emission required by Section 202(b) for vehicles at low-altitude.
This proposed regulatory action would establish the interim high-
altitude emission standards, and corollary certification require-
ments, contemplated by Section 202(f) through model year 1983.
(Beginning in 1984, the amended Clean Air Act requires that vehi-
cles must comply with Section 202(b) standards at all altitudes.)
This document is intended to fulfill the following requirements:
1.	Clean Air Act Required Specific Findings - Section
202(f)(3)(A-cT
A.	The economic impact on consumers, individual high-
altitude dealers, and the automobile industry, including
an economic assessment of the high-altitude regulations
in effect during the 1977 model year.
B.	The present and future availability of emission control
technology capable of meeting emission requirements
without reducing model availability.
C.	The likelihood that adoption of a high-altitude regula-
tion will result in any significant improvement in air
quality in any significant improvement in air quality in
any area to which it will apply.
2.	Impact Statements - EPA Regulations Require An Environ-
mental Impact Statement and Economic Impact Assessment
The severity of the air pollution problems in the larger,

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high-altitude cities dictates the need for the regulation.
According to the Council on Environmental Quality, Denver was
second only to Los Angeles in the number of days in 1975 when
national ambient air quality standards were violated. Albuquerque
was tied for third. Denver, Salt Lake City, and Albuquerque are
rapidly growing, automobile-oriented cities. The meteorological
conditions for these cities, frequent winter inversions and abun-
dant summer sunshine, in combination with the high-altitude and
extensive dependence on the automobile, results in air quality
problems that belie the size of the cities. (Denver, largest of
the three, is only the 24th largest metropolitan area in the
nation.) It is important that the emission control systems used on
high-altitude vehicles be designed and calibrated to operate as
efficiently as possible to reduce the severity of high-altitude air
quality problems.

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References
"Attitude of Denver Region Residents on Environmental Issues,"
Gruen, Gruen and Associates in cooperation with Engineering-
Science, Inc., and EPA Region VIII, 1977.
Bickert, Browne, Coddington and Associates' survey for United
Bank of Denver. Personal interviews with 517 randomly se-
lected residents of a five county region, 1974.
Denver Urban Observatory survey by Warren Weston et al, of
1090 randomly selected voters, 1976.
Denver Metropolitan Study, National Academy of Public Admini-
stration survey of 627 randomly selected voters in Denver,
Adams, Arapahoe and Jefferson counties, September, 1976.

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CHAPTER II
DESCRIPTION OF LDV AND LDT INDUSTRY
A.	Definition of Product
A light-duty vehicle (LDV) is currently defined as a passenger
car or passenger car derivative capable of seating 12 passengers or
less.
A light-duty truck (LDT) is any motor vehicle rated at 8500
pounds (3546 kg) Gross Vehicle Weight Rating (GVWR) or less, has a
vehicle curb weight of 6000 pounds (2722 kg) or less, has a maximum
basic vehicle frontal area of 46 square feet (4.3 square meters),
and is: a) designed primarily for purposes of transportation of
property or is a derivative of such a vehicle, b) designed pri-
marily for transportation of persons having a capacity of more than
12 persons or c) available with special features enabling off-
street or off-highway operation and use.
B.	Structure of the Industry (Production and Marketing)
U.S. manufacture of light-duty vehicles is almost entirely
done by the five major motor vehicle manufacturers: General
Motors, Ford Motor Company, Chrysler Corp., Volkswagen of America,
and American Motor Corp. In 1979, sales of passenger cars totalled
10.7 million of which 8.3 million were of domestic origin, 0.7
million were from Canada, and 1.7 million were from foreign manu-
facturers. The major foreign importers were Toyota, Volkswagen,
Nissan, Honda, and Fiat.
The manufacture of light-duty trucks sold in the U.S. is
primarily accomplished by the major domestic passenger car pro-
ducers. General Motors Corporation (Chevrolet and GMC divisions),
Ford Motor Company, and Chrysler Corporation (Dodge Truck Division)
all have separate truck divisions which produce light-duty as well
as heavy-duty trucks. American Motors Corporation operates the
Jeep division which manufactures light-duty trucks. The other
major domestic manufacturer of LDT's is the International Harvester
Corporation (IHC).
Some LDT's sold in the U.S. are imported. The majority
of U-S. imports of trucks come from the Canadian plants oper-
ated by U.S. domestic producers. Some imports, primarily light
pick-up trucks, under 4,000 pounds (1814 kg) GVWR, come from
Japanese producers. The major importers are Nissan (Datsun),
Toyota, Isuzu, and Toyo Kogyo. Both Toyota and British Leyland
Company import utility vehicles under 6,000 lbs. (2722 kg) GVWR.
Imports accounted for about 9% of all 1979 sales of trucks with a
GVWR less than 8500 pounds (3856 kg) GVWR.
Table II-l shows U.S. sales for LDV's and LDT's from 1974-
1979. Most data available on LDT's are presented in a 0-10,000

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Table II-l
U.S. New Car and Truck Sales, 1974-1979
Year
Cars
LDTs*
1979
10,700,000
2,900,000
1978
10,900,000
3,400,000
1977
10,800,000
2,900,000
1976
9,800,000
2,600,000
1975
8,300,000
2,000,000
1974
8,700,000
2,100,000
* Estimated.
Source: Automotive News, 1980 Market Data Book Issue; April 30, 1980.

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pound (0-4536 kg) category. Since the definition of LDT's in-
cludes only vehicles up to 8,500 pound (3846 kg) GVWR, some
adjustment to the 0-10,000 pound category was necessary for this
analysis. The industry production data available to EPA indicates
that about thirteen percent of all trucks with GVWR's less than
10,000 pounds (4536 kg) have GVWR's of more then 8,500 pounds (3856
kg). This thirteen percent figure is used in Table II-l and
throughout this analysis to adjust production data to fit the new
LDT definition.
These figures represent the numbers of both domestic and
imported vehicles bought by U.S. consumers in those years.
Data Resources^/ estimates that national sales of LDVs will
be 10.1 million in 1982 and 11.3 million in 1983. National sales
of LDTs are projected to be 2.8 million in 1982 and 3.2 million in
1983.
Sales of diesel powered . light-duty vehicles and trucks are
still a small fraction of total production, but are steadily
increasing each year. Diesel penetration into the two markets by
the late 1980's has been projected to be a high as 25%. Table
II-2 shows past sales and 1979 projections of diesel sales in
the U.S.
U.S. light-duty vehicle and truck manufacturers operate with a
fair degree of vertical integration. As is typical of many capital
intensive industries, the manufacturer seeks to assure itself of
some control over the quality and availability of the final pro-
duct. Thus, the major manufacturing companies have acquired sub-
sidiaries or started divisions to produce many of the parts used in
the manufacture of their cars and trucks. None, however, build
their vehicles without buying some equipment from independent
vendors.
The vertical integration typical of passenger car and truck
manufacturers extends beyond the production of the vehicle into its
sale. The manufacturers establish franchised dealerships to handle
retail trade and servicing of their products. Most also produce
and sell the parts and accessories required to service their
vehicles. Many of the truck dealerships are coupled with the
passenger car dealerships. As of January 1979, there was a total
of 24,051 passenger car dealerships and 22,189 truck dealerships
The total truck dealerships include dealerships for heavy-duty as
well as light-duty trucks, and accounts for those dealerships
operating jointly with passenger car sales offices.
Table II-3 provides a breakdown of all light-duty vehicle
dealerships by manufacturer and Table II-4 provides this infor-
mation for truck dealerships. The "Others" category in Table II-4
includes dealerships of manufacturers that produce only heavy-duty
vehicles, and also 1,211 dealerships for Plymouth which introduced
the 4-wheel drive Trail Duster (an off-road utility vehicle) in
1974.

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Table II-2
U.S. Sales of Diesel-Powered Light-Duty Vehicles and Trucks
Model
1976
1977
1978
1979*
Mercedes-Benz 1/
240D
300D
300SD
9,024
12,521
-0-
9,770
11,333
-0-
6,600
16,000
5,200
8,600
15,300
9,300
VW Rabbit 1J
and Dasher
-0-
7,500
36,386
110,000
Peugeot 504D 3/
4,549
4,914
5,547
8,100
General Motors 4/
350 Oldsmobile
350 Pick-up
260 Oldsmobile
-0-
-0-
-0-
-0-
-0-
-0-
35,180
16,920
-0-
118,000
31,000
50,000
IHC Scout 5/
970
1,237
1,231
1,000
TOTAL	27,064 34,754 123,064 351,300
* Projections.
1_/ Personal communication with Martin Emberger, Mercedes-Benz,
April 3, 1978.
2j Personal communication with L.L. Nutson, Volksagen, April 4,
1978.
3J Personal communication with Richard Lucki, Peugeot, March 1978.
4/ Personal communication with A. Lucas, General Motors, April 7,
1978.
5/ Personal communication with T.A. Jacquay, IHC, March 1978.

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Table II-3
Passenger Car Dealerships by Manufacturer
Manufacturer
Total
Franchises as
of Jan. 1,1979
Dealers as
of Jan. 1, 1979
Unit
Per
1978
Sales
Out let
1977
American Motors
1661
1661
105
112
Chrysler Corp.
9174
4786


Chrysler
3343

89
96
Dodge
2816

158
162
Plymouth
3015

133
143
Ford Motor Co.
10190
6639


Ford
5564

326
335
Lincoln
1642

115
112
Mercury
2948

195
172
General Motors Corp.
17210
11565


Buick
3050

256
245
Cadillac
1635

215
207
Chevrolet
5950

394
381
Oldsmobile
3330

302
294
Pontiac
3245

277
249
TOTALS:	38235	24651
Minus Intercorporate Dealers		600
Net Dealers:	24051
Source: Automotive News, 1979 Market Data Book, pp. 62,71.

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Table II-4
Truck Retail Outlets by Manufacturer
Manufacturer
Ford
Chevrolet
GMC
Dodge
IHC
American Motors
Others
TOTALS:
Adjustment for
Multiple Franchises
Net Dealers:
Unit Sales
Outlets as	Per Outlet
of Jan. 1,1979	1978
5648	233
5939	215
2721	121
3284	141
1675	70
1768	93
2822
23827	24651
1638
22189
Source: Automotive News, 1979 Market Data Book, pp. 44, 98.

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C.	Employment
It is estimated that about three and a half million workers
are employed in the manufacturing, wholesaling and retailing of
motor vehicles (passenger cars, trucks, and buses) with a total of
about $53 billion in wages paid to those employees. Most employ-
ment data are aggregated for producers of all classes of cars and
trucks since some production facilities manufacture both cars and
trucks. Statistics show that over 14 million workers were employed
in 1973 by motor vehicle related industries. The total annual
payroll of these workers amounted to over $119 billion (1973).
Much of this employment is centered in California, Michigan, Ohio,
New York, Indiana, Illinois, Missouri, and Wisconsin.
D.	High Altitude Sales
EPA has determined that approximately 3.5 percent of national
LDV sales occur in high-altitude areas. For LDTs this percentage
is somewhat higher (5.5) reflecting the fact that a major factor in
the economy of high-altitude areas is the extensive rangeland which
requires the use of pickups and four-wheel drive vehicles. The
above percentages were determined from 1979 data collected by the
MVMA. Applying these percentages to expected national sales for
1982 and 1983 _1 / gives high-altitude sales for 1982 and 1983 as
fallows:
LDVs
LDTs
Total
1982	353,000 154,000
1983	396,000 176,000
504,000
572,000
Total 749,000 330,000 1,076,000

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References
1/ Data Resources U.S. Long-Term Review, Lexington, Mass.,
Spring, 1980.

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CHAPTER III
AIR QUALITY IMPACT
In order to evaluate the air quality impact of high-altitude
emission standards, it was necessary to calculate the tons of each
pollutant which would be emitted both with and without the stan-
dards. To calculate the mass of emissions, it is necessary to
estimate the emission rates and deterioration rates of the vehi-
cles. The information contained in Tables III-l and III-2 was
taken from AP-42 IJ and serves as a basis for the required calcula-
tions. It should be noted, however, that these tables use underly-
ing assumptions which in some cases are not applicable for the
comparisons required. Therefore, the emission rates for some model
years were recalculated to reflect the scenarios which are to be
evaluated.
A. Baseline Case
The baseline case assumed that there would be no high-altitude
standards for model years 1982 and 1983, but that in model year
1984 and beyond, sea-level standards would be imposed at high
altitude. The results of the following analyses are summarized in
Table III-3 and III-4.
1. Baseline Light-Duty Vehicles (LDV)
The baseline case for emission factors, was developed from
limited samples of data of 1981-plus systems tested at both low and
high altitude. Table III-5 lists the available prototype results
for two major manufacturers with three-way control systems.
The averages for each manufacturer's data were then combined using
an approximate sales weighting. Table III-6 lists results of tests
for non-three-way control systems from two manufacturers and the
California Air Resources Board. The test results from Table III-6
were averaged with weighting factors for the number of vehicles
tested. The three-way and non-three-way emission rates were then
combined using the projected relative production proportions of
70 percent and 30 percent, respectively, as weighting factors.
The changes in low-to-high emission rates were determined by
using two separate methods and then taking their average. Table
III-7 outlines the approach for the two methods. The first method
assumes the difference in low-to-high emissions would be a pre-
dictor, and the second assumes the ratio of high-to-low emissions
could be applied to low-altitude emission rates to predict high-
altitude emission rates. For the difference method, the incre-
mental change of emissions between low- and high-altitude test
results were added to the low altitude emission rates as specified
by AP-42. The high-altitude emission rates, using the ratio method
were determined by multiplying the ratio of the average high-to-low
emission test data times the low-altitude emission rates. The
final high-altitude emission rates used for subsequent analysis

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Table III-l
Exhaust Emission Rates
Light-Duty Vehicles
For All Areas Except California and High Altitude
Pollutant
Model Year
A
B
(g/mile)
New Vehicle
Emission Rate
(g/mile)
Deterioration Rate
(per 10,000 miles)
HC
pre-1968
4.45
0.58
HC
1968-1974
2.43
0.53
HC
1975-1979
1.13
0.23
HC
1980+
0.13
0.23
CO
pre-1968
68.30
3.06
CO
1968-1974
31.14
6.15
CO
1975-1979
18.60
2.80
CO
1980
3.00
2.30
CO
1981+
1.40
2.00
The exhaust emission factor is calculated from the linear
equation; C * A + BY, where C is the exhaust emission factor for a
vehicle with cumulative mileage M, A and B are the factors listed
in the above table, and Y » M/10,000.

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Table III-2
Exhaust Emission Rates
Light-Duty Trucks: Both Weight Categories
For All Areas Except California and High Altitude
A	B


(g/mile)
(g/mile)


New Vehicle
Deterioration Rate
Pollutant
Model Year
Emission Rate
(per 10,000 miles)
HC
pre-1968
4.76
0.58
HC
1968-1969
3.25
0.54
HC
1970-1974
2.56
0.53
HC
1975-1978
1.92
0.46
HC
1979-1982
0.94
0.41
HC
1983+
0.31
0.23
CO
pre-1968
70.38
3.06
CO
1968-1969
42.08
5.44
CO
1970-1974
31.48
6.15
CO
1975-1978
23.44
5.70
CO
1979-1982
14.50
5.34
CO
1983+
3.87
2.00
The exhaust emission factor is calculated from the linear
equation; C = A + BY, where C is the exhaust emission factor for a
vehicle with cumulative mileage M, A and B are the factors listed
in the above table, and Y ¦ M/10,000.

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Table III-3
(AP-42 Table HI-I-1, Modified)
Exhaust Emission Rates
Light-Duty Vehicles
For High-Altitude Areas Only


A Cg/mi)
B (g/mi)


Nev Vehicle
Deterioration Rate
Pollutant
Model Year
Emission Rate
(per 10,000 miles)
HC
Pre-1968
6.03
0.55
HC
1968-1974
4.07
0.55
HC
1975-1976
1.83
0.23
HC
1977
0.70
0.23
HC
1978-1979
1.83
0.23
HC
1980
0.32
0.23
HC
1981-1983
0.32
0.23
HC
1984+
0.13
0.23
CO
Pre-1968
110.04
2.81
CO
1968-1974
76.73
4.24
CO
1975-1976
38.31
2.80
CO
1977
10.30
2.80
CO
1978-1979
38.31
2.80
CO
1980
9.44
2.30
CO
1981-1983
6.24
2.00
CO
1984+
1.40
2.00
The exhaust emission
factoT is calculated from the linear
equation C ¦
A + BY, where
C is the exhaust
emission factor tor a
vehicle with
cumulative mileage M, A and B
are the factors listed
in the above
table, and Y ¦
M/10,000.


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-18-
Table III-4
(AP-42 Table HI-II-1)
GxhausC Emission Rates
Light-Duty Trucks: Both Weight Categories
	For High-Altitude Areas Only	


A (g/mi)
B (g/mi)


New Vehicle
Deterioration Rate
Pollutant
Model Year
Emission Rate
(per 10,000 miles)
HC
Pre-1968
6.45
0.55
HC
1968-1972
5.00
0.55
HC
1970-1974
4.28
0.55
HC
1975-1976
3.17
0.47
HC
1977
2.80
0.47
HC
1978
3.17
0.47
HC
1979-1982
1.52
0.41
HC
1983
0.89
0.23
HC
1984+
0.31
0.23
CO
Pre-1968
113.50
2.81
CO
1968-1979
88.36
3.91
CO
1970-1974
77.58
4.24
CO
1975-1976
54.19
4.84
CO
1977
44.81
4.84
CO
1978
54.19
4.84
CO
1979-1982
38.31
5.34
CO
1983
27.68
2.00
CO
1984+
3.87
2.00
The exhaust emission factor is calculated from the linear
equation C * A + BY, where C is the exhaust emission factor for a
vehicle with cumulative mileage M, A and B are the factors listed
in the above table, and Y = M/10,000.

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-19-
Table III-5
Three-Way Control System
Baseline Test Results
HC
Low Alt. High Alt,
CO
Low Alt. High Alt,
Ford

' 0.21
0.485
2.29
14.66


0.74
1.29
1.88
10.02


0.11
0.29
2.5(ave
3) 8.87(


0.27
0.65




0.17
0.62


Ford
Ave.
0.3
0.67
2.33
10.26
GM

0.18
0.25
2.0
4.2


0.22
1.27
2.7
5.6


0.28
0.39
3.2
4.3


0.28
0.40
2.1
4.8


0.23
0.24
2.0
2.4
GM
Ave.
0.24
0.31
2.4
4.26
3)
Sales-Weighted
Average	0.26
0.45
2.37
6.66

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-20-
Table III-6
Non-Three-Way (Ox. Cat. + Air)
Baseline Test Results
	HC			CO	
Low A1t. High Alt.	Low Alt. High Alt.
Carb (Avg. 32
vehicles)
Honda (1
vehicle)
Ford (Avg. 5
vehicles)
0.58	1.02	6.11	18.44
0.24	0.8	3.16	9.0
0.673 1.25	5.4	23.82
Test Vehicle
Weighted
Average
0.58	1.04
5.94
18.90

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-21-
Table III-7
High-Altitude Emission Rate Calculation
	Light-Duty Vehicles	
HC	CO
Low Alt. High Alt. Low Alt. High Alt,
Three-Way (70%)	0.26	0.45	2.37	6.66
Non-Three-Way (30%) 0.58	1.04	5.94	18.90
System-Weighted	0.36	0.63	3.44	10.33
Average
Incremental Increase:	0.27	6.89
Ratio Increase:	1.74	3.00
Low-Altitude Emission Rate:
1980 :	0.13	3.0
1981+:	0.13	1.4
1980 High-Altitude Emission Rate:
(increment):	0.40	9.89
(ratio):	0.23	9.00
Average:	0.32	9.44
1981-83 High-Altitude Emission Rate:
(increment):	0.40	8.29
(ratio):	0.23	4.20
Average:	0.32	6.24

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-22-
were based on an average of the emission rates predicted by the two
methods.
2. Baseline Light-Duty Truck (LPT)
For the 1982 model year, LDTs must meet low-altitude standards
of 1.7 g/mi, 18.0 g/mi, and 2.0 g/mi for HC, CO, and NOx respec-
tively. EPA has estimated that 50 percent of the LDTs will utilize
control systems which include oxidation catalysts plus air pumps
while the other 50 percent will need oxidation catalysts only. The
exhaust emission standards for 1975-78 model year LDVs were very
similar to the above 1982 standards for LDTs. The 1975-78 stan-
dards for LDV were 1.5 g/mi, 15 g/mi, 2.0 g/mi, for HC, CO, and
NOx, respectively. Furthermore, the emission control systems for
1975-78 LDVs were virtually the same as EPA's estimated control
systems for 1982 LDTs which are given above. Therefore, 1975-78
LDV data will be used in lieu of 1982 LDT data.
A review of surveillance data from high-altitude LDVs from
model years 1975-1978 (excluding 1977) was performed. The data
were segregated between oxidation catalysts plus air pump (OC+AP)
and oxidation catalyst only (OC) vehicles. The average initial
emission rates for each group was determined. Then the OC+AP and
OC only averages were weighted 50/50. This analysis resulted in
emission rates very close to those in AP-42 for the 1975 and 1977
model years for LDVs. Namely, emission rates of 1.52 for HC, and
38.31 for CO. These values were then used to approximate the
performance of the 1979-1982 LDTs in the analysis.
The light-duty truck high-altitude emission rates for 1983
were approximated by assuming that the same change in emission
rates at low altitude between 1982 and 1983 would also occur at
high altitude. Therefore, the absolute differences in low-altitude
emission rates between 1982 and 1983 were subtracted from the 1982
high-altitude emission rates to find the 1983 high-altitude
values. The deterioration rates were unchanged from those pub-
lished in AP-42.
B. High-Altitude Control Case
The control case assumes that standards will be in force at
high altitude in model years 1982 and 1983, while for 1984 and
beyond, vehicles at high altitudes meet the low-altitude standards.
1. High-Altitude Controls for Light-Duty Vehicles (LDV)
For model years 1982 and 1983, the standards were assumed to
apply at high altitude. For LDVs these are 0.57 g/mi HC and 7.8
g/mi CO. The ERs for these emissions at high altitude were calcu-
lated by assuming that the ratio of ER to the standard at low
altitude, equals the ratio of ER to the standard at high altitude.
Thus, the ERs at high altitude for HC and CO were calculated as
follows:

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-23-
ERHC high _ 0.13	(5)
0.57 = 0.41
erhc high - °-18	(6)
ERC0 1.40	(7)
7.8 3.4
ERC0 = 3.21	(8)
Thus, for LDVs the following values were used:
HC	CO
Model Year	ER	DR	ER	DR
1982-83	0.18	0.23	3.21	2.00
1984 +	0.13	0.23	1.40	2.00
2. High-Altitude Controls for Light-Duty Trucks (LDTa)
For model year 1983, the HC values were adjusted to reflect
the proper low-altitude standard based on the current proposal.
Following that, the assumption that the ratio of ER to standard at
low altitude equals the ratio of ER to standard at high altitude,
was used to determine the high-altitude ERs for both HC and CO.
The applicable proportional reduction standards at high
altitude for LDTs are:
1982	- 2.0 HC, 26 CO
1983	- 1.0 HC, 14 CO
Thus, the applicable ERs were calculated as:
HC - 1982
ERhigh „ 0.94	(9)
2.0 1.7
HC h - 1.11	<10>
HC - 1983
ERhigh _ 0.31	(ID
1.0 * 0.8
HC ERhigh - 0.39
(12)

-------
CO - 1982
ERhlgh _ 14.5	(13)
26 18
CO ERhigh = 20.94	C14)
CO - 1983
ERhigh
3.87	(15)
14 10
00 E*high " 5*42	(16)
The resultant values used for the high-altitude control case are
thus:
HC	CO
Model Year
ER	
DR
ER
DR
1982
I.II
0.41
20.94
5.34
1983
0.39
0.23
5.42
2.00
1984 +
0.31
0.23
3.87
2.00
The avetage-life-emission rates for light-duty vehicles and
light-doty ttrucks can be determined by applying the assumed half-
life miles to the deterioration rates (DR) from AP-42. The average
half-life miles for LDVs iB 50,000 miles, and for LDTs is 65,000
miles. The computed average-life-emission rates with and without
the high-altitude standards are shown in Table III-8, along with
the anticipated incremental reductions.
The high-altitude evaporative emission standard will provide
assurance that the control systems vill have sufficient capacity to
handle the greater evaporative emissions at high altitude. The
standard has been set at a level to account for proportionally
higher emissions with increase in altitude (assuming the same
technology with adequate capacity). EPA believes that the current
systems have sufficient capacity and the standards are needed to
assure future systems vill also be designed with capacity for
operation at high altitude. Because no additional controls are
required, other than the design constraint to assure adequate
evaporative control system capacity, no air quality benefit is
being claimed for the proposed high-altitude evaporative emission
standard.
Table III-9 shows the LDV, LDT, and all-vehicle fleet emis-
sions, with and without the 1982 and 1983 high-altitude standards.
The overall impact an air quality may be estimated by looking
at the overall change (including growth in traffic) from the base

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-25-
Table II1-8
Average Lifetime Emission Rate
Grams/Mile
1982 and 1983 Vehicles
HC	CO
Light-Duty Vehicles
Baseline	1.47	16.33
High Altitude Stds.	1.33	13.21
Reduction	0.14 (9.5%)	3.12 (19.1%)
1982 Light-Duty Trucks
Baseline
High Altitude Stds.
Reduction
4.19
3.78
0.41 (9.8%)
73.02
55.65
17.37 (23.8%)
1983 Light-Duty Trucks
Baseline
High Altitude Stds,
2.39
1.89
40.68
18.42
Reduction
0.5 (21%)
22.26 (55%)

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Table III-9
Fleet Emissions With (w) and Without (w/o)
1982 and 1983 High-Altitude Emission Standards


Hydro
carbons
(g/mi)




1980
1982
1984
1987
1995
LDV w/o

6.59
4.85
3.59
2.50
1.84
LDV w

6.59
4.84
3.55
2.47
1.84
% Reduction

0
0.2%
1.1%
0.9%
0
LDT w/o

10.10
8.52
7.08
5.07
2.72
LDT w

10.10
8.48
6.96
4.99
2.71
% Reduction

0
0.5%
1.7%
1.6%
0.4%
All Vehicles
w/o
8.30
6.48
5.05
3.55
2.34
All Vehicles
w
8.30
6.42
4.99
3.50
2.33
% Reduction

0
0.3%
1.2%
1.4%
0.4%


Carbon
Monoxide
¦ (g/mi)




1980
1982
1984
1987
1995
LDV w/o

67.8
57.5
38.3
25.0
15.0
LDV w

67.8
51.2
37.4
24.3
15.0
% Reduction

0
0.6%
2.3%
2.8%
0.0%
LDT w/o

97.0
90.7
81.2
58.7
27.7
LDT w

97.0
88.9
75.9
55.0
26.9
% Reduction

0
2.0%
6.5%
6.3%
2.9%
All Vehicles
w/o
83.4
69.7
56.1
38.3
21.1
All Vehicles
w
83.4
69.0
54.2
37.0
20.9
% Reduction

0
1.0%
3.4%
3.4%
0.9%

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-27-
year of 1980. The years 1982 and 1987 were chosen for the future
years because the Clean Air Act requires attainment of the CO and
oxidant standards by 1982. An extension of up to 1987 can be
allowed if all reasonable control measures will not attain the
standards by that date. The years 1984 and 1995 were chosen to
indicate the time when the standards would have their greatest
effect on air quality in Denver (1984) and when the effect of the
standards would become minimal (1995).
For CO, the emission reductions can be directly compared to
the needed air quality reductions since CO concentrations are
almost entirely due to direct emissions from motor vehicles.
Photochemical oxidants, however, are not directly emitted. They
are the result of complex reactions between oxides of nitrogen
(NOx) and hydrocarbons (HC) in the presence of sunlight. The NOx
and KG are emitted by both motor vehicles and stationary sources.
Transport of pollutants, and their mixing with unpolluted air,
affects the concentration of both CO and oxidants.
The best means of relating emissions to air quality is through
the use of complex dispersion models (photochemical dispersion
models in the case of oxidants). However, for the purpose of
determining the relative impact of the 1982 and 1983 high-altitude
standards, a comparison of the reductions in CO and HC emissions is
sufficient. High-altitude NOx emissions will not be affected by
the 1982 and 1983 standards since NOx emissions at high altitude
are less than at low altitude. Since Denver, Colorado had the
highest measured CO and ozone concentrations of any of the high-
altitude nonattainment areas in 1977, the estimated emissions for
this city will be used to illustrate the relative impact of the
standards on air quality.
Total emissions of CO and HC for Denver are shown in Table
111-10. These are based on vehicle-miles-traveled per day (VMT)
of 21 million for 1980, 22 million for 1982, 23 million for 1984,
and 24 million for 1987, and fleet emission rates from Table 1II-9
(VMT/Day x Emission Rates ¦ Daily Emissions). In calculating
emissions with 1982 and 1983 high-altitude standards, light-duty
vehicles and light-duty trucks are affected by the standards,
heavy-duty trucks are not. Forty tons per day of stationary source
hydrocarbon emissions are included in the hydrocarbon emission
totals for all years.
Table 111-11 shows the total pollution reduction expected from
this regulation. This reduction was calculated from the average
lifetime emission rates of Table III-8, useful lives of 100,000
miles for LDVs, and 130,000 miles for LDTs, and high-altitude sales
estimate for LDVa and LDTs in 1982 and 1983 (Chapter II).
In conclusion, the 1982-83 high-altitude interim regulations
will reduce Denver area HC emissions by 1.4 tons per day and CO
emissions by 46 tons per day in 1984. By 1987, when the Denver
area must be in compliance with the National Ambient Air Quality

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-28-
Baseline
With Stds
Table III-10
Denver Area Emissions
	(tons/day)	
1980	1982
1984
1987
HC
CO
HC
CO
HC
CO
HC
CO
231.7
1927
196.8
1687
162.2
135.8
133.7
1011
231.7
1927
196.3
1670
160.8
131.2
132.4
977
Reduct ion
(tons/day)
(percent)
0 0 0.5 17 1.4	46 1.3 34
0 0 0.3% 1.0% 0.9% 3.4% 1.0% 3.4%
Table III-ll
Total Pollution Reductions for 1982 and 1983
	(thousands of tons)	
HC	CO
LDV	11.6	258
LDT	21.5	937
Total
33.1
1,195

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-29-
Standarda, the 1982-1983 high-altitude interim regulations will
reduce HC emissions by 1.3 tons per day and CO emissions by 34 tons
per day. Furthermore, all high-altitude counties will benefit from
the HC reduction of 33,100 tons and the CO reduction oE 1,195,000
tons resulting from this regulation. These reductions will help
make Denver and other high-altitude cities healthier and more
pleasant places to live.

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-30-
References
"Mobile Source Emission Factors," EPA, March 1978, EPA-400/9-
78-005.

-------
-31-
CHAPTER IV
ECONOMIC IMPACT ANALYSIS OF THE
1977 HIGH-ALTITUDE EMISSION STANDARDS
A. Introduction
The 1977 model year automobile high-altitude emission regula-
tions applied to vehicles sold in a "designated high-altitude
location," which was defined as: "counties located substantially
above 1,219 meters (4,000 feet) in elevation." This included a
total of 112 counties in 10 western states and excluded California.
The complete list is contained in Figure IV-1.
Under the 1977 regulations, all dealerships in high-altitude
counties could only sell those light-duty car-line configurations
(both light-duty vehicles and light-duty trucks) that were certi-
fied by EPA to meet 1977 high-altitude emission standards of 15
grams/mile CO, 1.5 grams/mile HC, and 2.0 grams/mile oxides of
nitrogen (NOx). The only exception was if the manufacturer had a
substantial reason to believe an uncertified vehicle, sold out of a
high-altitude dealership would be used principally at a low-alti-
tude location. Similarly, manufacturers and low-altitude dealers
were forbidden from selling any light-duty vehicle (gasoline or
diesel) or light-duty truck that was intended for principal use at
a high-altitude location, unless it was certified for high alti-
tude. The 1977 emission standards were the same at both high and
low altitudes.
The National Automobile Dealers Association (NADA) had 888
high-altitude dealer members in 1977. It is estimated that there
were 100 to 150 additional high-altitude dealers that were not
members of NADA. This means a total of approximately 1,000 high-
altitude dealers were affected by EPA's 1977 model year regula-
tions .
These 1,000 dealers were about 3 percent of the national total
of dealerships. Similarly, sales by high-altitude dealers totaled
about 3.5 percent of national automobile sales in 1979. However,
LDT high-altitude sales were relatively higher at approximately 5.5
percent of the national LDT sales in 1977 (see Tables IV-1 and
IV-2). Because of the relatively small market share of high-
altitude areas and the certification requirements, many types of
vehicles were not certified by manufacturers for sale at high
altitudes.
With the enactment of the Clean Air Act Amendments of 1977,
Congress suspended the 1977 model year high-altitude regulations
which had required separate certification of all high-altitude
vehicles. The following is an analysis of the economic impact of
the 1977 high-altitude regulations on automobile dealerships,
manufacturers, consumers, and the general public.

-------
-32-
Figure IV-1
Counties Located Substantially Above 1,219 Meters
	(4,000 feet) in Elevation	
ARIZONA
Apache
Navajo
COLORADO


Adams
Denver

Lake
Pitkin
Alamosa
Douglas

LaPlata
Pueblo
Arapahoe
Archuleta
Eagle
Elbert

Larimer
Las Animas
Rio Blanco
Rio Grande
Boulder
Fremont

Lincoln
Routt
Chaffee
Garfield

Mesa
Saguache
Clear Creek
Gilpin

Mineral
San Juan
Conejos
Grand

Moffat
San Miguel
Costilla
Gunnison

Montezoma
Summit
Crowley
Hinsdale

Montrose
Teller
Custer
Huerfano

Morgan
Washington
Colores
Jackson

Ouray
Weld
Delta
Jefferson
IDAHO
Park

Bannock
Butte

Custer
Minidoka
Bear Lake
Camas

Franklin
Oneidaka
Bingham
Caribou

Fremont
Power
Blaineille
Cassa

Jefferson
Teton
Bonneville
Clark
MONTANA
Madison
Valley
Beaverhead
Gallatinn

Madison
Park
Deer Logde
Jerrerson
NEBRASKA
Meagher
Silver Bow
Banner
Kimball
NEVADA
Sioux

Carson City
Esmeralda

Lander
Storey
Douglas
Eureka

Lyon
White Pine
Elko
Humbolt

Mineral



NEW MEXICO

Bernalillo
Guadalupe

Mora
Sierra
Catron
Harding

Rio Arriba
Socorro
Colfax
Lincoln

Sandoval
Tacos
Curray
Los Alamos

San Juan
Torrance
De Baca
Luna

San Miguel
Union
Grant
McKinley
OREGON
Santa Fe
Valencia
Lake

UTAH


Beaver
Emery

Piute
Tooele
Box Elder
Grand

Rich
Uintah
Cache
Iron

Salt Lake
Utah
Carbon
Juab

San Juan
Wasatch
Daggett
Davis
Kane
Millard

Sanpeto
Sevier
Wayne
Weber
Duchesne
Morgan

Summit


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-33-
Figure IV-1 (cont'd)
WYOMING
Albany	Hot Springs	Niobrara	Sweetwater
Carbon	Johnson	Park	Teton
Converse	Laramie	Platte	Unita
Fremont	Lincoln	Sublette	Weston
Goshen	Natrona

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Table IV-1
New Car Registrations, 1976-1979
For High-Altitude States
Showing Percentage of Each State to Total Registrations
State
1979
Registrations
% of
National
Total
1978
Registrations
%
National
Total
1977
Registrations
% of
National
Total
1976
Registrations
% of
Nation.
Total
Colorado
134,369
1.30
128,539
1.17
121,335
1.13
107,846
1.11
Idaho
30,030
.29
32,695
.30
32,637
.30
26,284
.27
Mont ana
24,297
.24
29,963
.27
29,177
.27
28,317
.29
Nevada
42,632
.41
43,516
.40
39,419
.37
31,040
.32
New Mexico
52,267
.52
53,794
.49
52,410
.49
49,410
.51
Utah
50,305
.49
55,910
.51
52.544
.49
43,567
.45
Wyoming
20,682
.21
18,880
.17
18,220
.17
15,191
.15
TOTAL
354,582
3.46
363,297
3.32
345,742
3.20
301,655
3.10
High-Altitude States: The 7 western areas with a substantial number of counties over 4,000 feet.
Sources: Automotive News 1978 Market Data Book and MVMA Facts and Figures, 1980.

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Table IV-2
New Light-Duty Truck Registrations _1/, 1974-1977 2/ (in thousands)
For High-Altitude States
	Showing Percentage of Each State to Total Registrations
X of	X of	% of	% of
1977 National	1976 National	1975 National	1974	National
State
Registrations
Total
Registrations
Total
Registrations
Total
Registrations
Total
Colorado
44
1.50
44
1.71
35
1.72
41
1.81
Idaho
22
.75
20
.78
16
.81
18
o
00
•
Montana
19
.64
21
.83
18
.86
19
CM
CO
*
Nevada
14
.50
12
.46
10
.50
9
.43
New Mexico
26
.90
25
.96
20
.99
20
.92
Utah
25
.84
23
.88
20
.95
18
.53
Wyoming
16
.54
14
.57
13
.62
12
.53
TOTAL
166
5.67
159
6.19
132
6.15
137
6.09
37 Redefined Light-Duty Truck Class 0-8,500 pounds GVW.
_2/ Data for more recent model years are not currently available.
High-Altitude States: Hie 7 western areas with a substantial number of counties over 4,000 feet.
Source: Automotive News 1978 Market Data Book.

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-36-
B. Dealerships .
The light-duty vehicle (LDV) and light-duty truck (LDT)
industries produce a wide variety of vehicles consisting of many
significant variations in vehicle design, size, and configuration.
The vehicles vary by manufacturers, model, engine size, axle range,
transmission type, carburetor type, etc. During the 1977 high-
altitude regulations, approximately 50 percent of domestic and
foreign vehicle configurations were not available for purchase at
the approximately 1,000 high-altitude dealerships in 112 western
counties.
Of the configurations that were certified, some were certified
but still not made available to high-altitude dealers because of
drivability problems. Some others were later withdrawn by the
manufacturer due to failure to meet performance standards. If the
1977 regulations had continued, other configurations of vehicles
probably would have been certified in later years.
The amount of economic hardship incurred by individual high-
altitude automobile dealers ranged from an insignificant to minor
impact for most dealers, to a very significant impact for a minor-
ity of dealers. In 1977, NADA provided EPA with a list of high-
altitude dealer members (both domestic and import) who had expres-
sed difficulties due to the high-altitude regulations. This list
is not a complete list of dealers who experienced problems, but
does reflect the results of a 1976 NADA survey of their 888 high-
altitude members regarding the impact of the 1977 regulations, and
dealer complaints. The list includes 37 dealers from 8 of the 10
affected states. The two states not represented, Arizona and
Oregon, contained only one high-altitude county each.
Eighteen dealers were chosen at random and visited during a
1977 EPA survey to determine the amount of economic impact incurred
by dealers due to the 1977 high-altitude regulations. Meetings
were also held in Salt Lake City and Denver with EPA representa-
tives and groups of dealers and their state NADA representatives.
Some of the types of problems that dealers expressed during those
meetings are discussed below.
The unavailability of certain models and powertrain configura-
tions appeared to be the most significant problem. Manual trans-
missions, smaller engine sizes, and certain axle ratios were
frequently not certified for sale at high altitude. For example,
the Honda Civic and the Pontiac "Iron Duke" engine, both of which
had received heavy national advertising, were not available.
Substantial sales losses were claimed as a result of these circum-
stances. It was also emphasized that subsequent parts and service
work are also lost with each lost sale.
Fringe dealers most commonly complained that they were exper-
iencing no air quality problems, and therefore could not understand
the necessity for regulations which they felt were so discrimina-

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-37-
tory against them. They also indicated that a substantially larger
number of low-altitude cars, belonging to tourists, hunters,
students, and government installation employees operate in their
counties than the resident vehicle population. In several sparsely
populated fringe counties it was estimated that more vehicles
travel on interstate highways through the counties on a single day,
than the entire vehicle population of the counties. Several fringe
dealers complained that neighboring counties with substantially
more population at substantially higher elevations throughout most
of the county were designated low altitude.
Dealers generally complained about the increased cost of
high-altitude models. High-altitude kits on certain foreign models
cost as much as $194. Although the high-altitude option cost on
domestic vehicles is relatively low, the increased price associated
with unavailability of manual transmissions and low-displacement
base engines can add over $500 to the cost of a high-altitude
model.
Many dealers, especially those located in fringe areas,
indicated that their dealer trade activities had severely suffered.
They indicated that dealer trades were daily occurrences and that
the high-altitude regulations had eliminated their ability to trade
with low-altitude dealers. Since customers frequently seek models
with specific color, trim, and optional equipment, the inability of
a dealer to readly obtain a given model from a nearby dealer
frequently results in a lost sale. Small dealers are particularly
hurt since they do not have the capital to stock a larger number of
vehicles.
Fleet sales are another concern. Since such sales frequently
involve tens to hundreds of cars, even a $20 price differential for
high-altitude equipment can result in a lost sale. Although fleet
vehicles sold for prinicpal use at high altitude are required to be
certified at high altitude, dealers claimed that fleet owners
frequently purchased low-altitude vehicles through their home
office at a low-altitude location and then distributed them to both
high- and low-altitude areas.
Many dealers stated that they felt there was no enforcement of
the high-altitude regulations. They expressed instances where
high-altitude residents, including their own previous customers,
had come in for service with a low-altitude model purchased from a
low-altitude dealer. They indicated that servicemen and students
merely purchased low-altitude cars from their permanent residence
and that local residents would have relatives in low-altitude areas
purchase cars and immediately sell them to the high-altitude
resident.
Poor fuel economy and driveability was also a common com-
plaint. One Volkswagen dealer claimed that Budget Rent-a-Car
Company turned down his bid for a fleet sale due to the higher cost
and safety problems associated with the poor driveability of

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high-altitude models. One dealer claimed a higher customer dis-
satisfaction with 1977 high-altitude cars than any previous year.
Morale problems with dealer employees, as well as high
turnover rates, were also indicated to be a result of increased
customer complaints. Dealers claimed that their images were
tarnished since they were frequently accused of "bait-and-switch"
tactics relative to nationally advertised models and equipment
which they could not offer to their customers. In addition, they
found it difficult to explain to low-altitude tourists why they did
not stock emission-related parts to repair their vehicles.
A survey sample of urban and rural NADA high-altitude members
was conducted in August, 1978 in cooperation with EPA (see Figure
IV-2). Of the 42 responses received from the states of Colorado,
Montana, New Mexico, Nevada, Oregon, and Wyoming, 23 were from
urban areas and 19 were from rural areas.
The results of the survey showed an average increase in sales
from the 1976 model year to the 1977 model year of approximately
15 percent. Whereas, the national increase in automobile sales for
the same period was approximately 6 percent. Thus, increases in
sales from the high-altitude dealers who responded to the survey
averaged two and one-half times higher than national automobile
sales increases over the same period. This higher than national
average sale increase may largely reflect the higher than national
average population growth rates in high-altitude areas. It is
possible that without the 1977 regulations, 1977 model year sales
may have increased by even more than 15% over 1976 model year
sales.
The respondents to the NADA questionnaire felt that they lost,
on the average, around 15 sales as a result of the 1977 high-
altitude regulations. This could have meant an additional average
increase of 1977 model year sales over 1976 model year sales of 6%,
for a total of a 21 percent average increase. The 21 percent
average increase for high-altitude areas would have been substan-
tially higher than the national average of 6 percent, for the same
period.
Dealer respondents to the questionnaire felt that "taking into
account the profit margin on a new vehicle, as well as the profit
resulting on any resulting trade-in and service," their estimated
profit loss was, on the average, $900 from each new car sale lost.
This would have meant an average loss in revenues of approximately
$13,500 per respondent because of the 1977 high-altitude regula-
tions. However, the rapid growth in high-altitude sales during
1977 tends to indicate generally rising rather than falling
profits.
C. Manufacturers
The primary reason given by the manufacturers for limited
certification during the 1977 regulations is that the relatively

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Figure IV-2
High-Altitude Regulations Quantitative Analysis
	of Economic Impact 	
NAME OF DEALERSHIP:
ADDRESS OF DEALERSHIP:
MAKE:
TYPE OF DEALERSHIP: ( ) Urban	( ) Rural
(1) Please indicate the monthly car sales volume figures for the
following months:
1975	1977
September
units
January
units
November
units
March
units
1976

May
units
January
units
July
units
March
units
September
units
May
units
November
units
July
units
1978

September
units
January
units
November
units
March
units


May
units
NOTE: If additional explanatory information is necessary, please
attach on a separate sheet.
(2)	During the 1977 model year, when the High-Altitude Regulation
was in effect, how many sales would you estimate were lost as a
result of the regulation:
None ( )	10 - 15 ( )
1-5 ( )	over 15 ( )
(3)	Taking into account the profit margin on a new vehicle, a9 well
as the profit on any resulting trade-in and service, what would you
estimate the profit loss to be resulting from each new car sale
which is lost?
(Please return by August 7, 1978, to NADA's Legislative Department,
8400 Westpark Drive, McLean, Virginia 22102.)

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small significance of the high-altitude market relative to national
markets (4 percent) did not justify the development costs involved
in certifying all vehicle configurations. Therefore, only certain
configurations were usually certified for a model. Manufacturers
primarily determined which vehicles would certify based upon
ability to meet standards, market considerations, and time con-
straints. At least one manufacturer was unable to certify some of
its more popular 1977 model year high-altitude configurations
because of lack of time in meeting certification. They, therefore,
felt a greater relative impact on sales.
Except for the aforementioned instance, manufacturers gener-
ally did not feel they had suffered significant economic impact due
to the 1977 regulations. In fact, generally when looking at their
high-altitude sales for before, during, and after the 1977 regula-
tion, no clear pattern arose and no adverse impact could be quanti-
fied. These results seem to partly reflect the "crossover" of
sales that generally occurred. That is, usually when a consumer
could not purchase a desired vehicle configuration, because it was
not certified and therefore unavailable at high altitudes, he or
she purchased another vehicle configuration that was certified and
available, as opposed to deferring the purchase altogether. This
"crossover" could have been within the same model configuration,
between foreign manufacturers, between domestic manufacturers, or
between foreign manufacturers and domestic manufacturers. Gener-
ally from the manufacturers' standpoints, it also seemed to average
out fairly well. They picked up about as many sales due to "cross-
over" as they lost because of it. However, this crossing over or
shifting of sales was significant at the more micro-dealer level in
many instances.
Another reason manufacturers felt little economic impact was
the high-altitude market's small significance when compared to the
total U.S. market, i.e., only about of only approximately 3% of
national sales. However, as stated, manufacturers who were
unable to certify certain important configurations due to lack of
time in the certification process did feel more of an impact on
sales, although it was still minor relative to national sales.
This problem may have, in part, been due to poor management of time
by the manufacturers. Eventually, this problem would have been
resolved in future model years.
Another minor cost incurred by the manufacturers was the cost
of the high-altitude equipment and its certification. The equip-
ment costs were approximately $20 to $40 per vehicle. The incre-
mental certification costs were approximately $10,000 per vehicle
per engine-family, excluding developmental, administrative, and
test-vehicle costs. Only one vehicle was required for testing per
engine-family per emission-control-system combination. A small
part of the test vehicle cost could be regained through resale.
The $10,000 figure also assumes the necessity of having to accumu-
late 4,000 miles prior to testing. However, most modifications for
high altitude could be performed on an existing 4,000 mile low-

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altitude vehicle, obviating the need and cost of running 4,000
miles on an existing data vehicle.
D. Consumers
The economic impact felt by consumers was primarily in four
areas:
1.	Reduced availability of desired vehicle configurations.
2.	Increased vehicle costs because of the high-altitude
emissions equipment.
3.	Some losses in driveability and fuel economy.
4.	Some misallocation of emission control costs between
high-altitude and low-altitude consumers.
The first point, the reduction of product availability and
differentiation, impacted the consumer in two ways. First, a
consumer might not have been able to purchase the vehicle config-
uration that he or she felt best fulfilled his or her needs and
desires. Secondly, if a desired product was not available, it may
have been necessary for the consumer to pay an increased cost for a
substituted vehicle configuration. An example of this is the
unavailability of a manual transmission and low-displacement
engine. This might require the consumer to spend an additional
$500 for a certified automatic transmission and larger engine.
The second area of economic impact on the consumer was the
cost associated with the purchase of high-altitude equipment.
Although the high-altitude equipment cost on most vehicles was
relatively low at $20 to $40 (approximately 1/2 of 1 percent of
average sales price), high-altitude packages cost as much as $194
on certain foreign models.
Third, there were some problems in driveability and fuel
economy associated with some certified configurations, although
some vehicles improved in both areas. This problem would have also
been reduced over time as more experience was gained by the manu-
facturers and the dealers, and appropriate adjustments made at the
design and engineering level.
The fourth area of impact reflects the high degree of national
mobility and the large number of low-altitude visitors (whose
vehicles are often not as well adjusted for high-altitude condi-
tions as those of residents) to high-altitude areas. In some
high-altitude counties, the number of low-altitude tourists exceeds
the number of high-altitude residents. The Colorado Vistors Bureau
estimates that there were 9 million tourists to the State of
Colorado in 1977 and approximately 10 million in 1978. Approxi-
mately 20 percent of these are winter visitors with the remainder
visiting in spring, summer, and fall. The Colorado State Highway

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Department estimates that there were approximately 18.6 billion
vehicle miles traveled (VMT) in Colorado in 1977. An estimated 12
percent or 2.2 billion VMT's of the total were estimated by the
Highway Department to be from out-of-state vehicles. This means
that although the problem is caused by both high- and low-altitude
residents, most of the cost was borne by the high-altitude resi-
dents in the form of higher vehicle prices. However, some of the
cost was borne by low-altitude residents, because manufacturers
often spread part of the cost of high-altitude equipment over their
west coast or national sales.
E.	Public
Although it appears increasingly that the automobile consumers
and the public are becoming one in the same (1977 vehicle registra-
tions were approximately 65 percent of 1977 U.S. population).
There is a large number of nonautomobile owners in the general
public. Among automobile owners there also is a broad range of use
from several hundred vehicle miles traveled (VMT) per year to over
50,000 VMT per year.
The air quality problems in Denver, Salt Lake City, and many
other high-altitude areas are severe. The main source of pollu-
tants in these areas is the automobile. Pollution from the auto-
mobile is further compounded by natural conditions. Thus, the
automobile user is largely responsible for the critical air pollu-
tion problem in most high-altitude areas. However, not only the
auto consumer, but also the rest of the general public, must bear
the burden and costs of air pollution.
To the extent the 1977 regulation reduced emission levels
(minor as it may have been), costs which had previously been
externalities of the automobile and borne by the general public
were shifted back, in part at least, to the automobile consumer and
manufacturer. Thus, the additional cost of new air pollution
control devices and requirements are not really "new costs" but are
in fact "existing costs" which are being shifted more equitably to
the user and beneficiary of the automobile. This does not mean
that any cost level for emission control is justified. Cost
effectiveness considerations must guide emission control, and
programs must be efficiently and equitably administered.
F.	Summary
The economic impact of the 1977 emission regulations was felt
by high-altitude automobile dealers, manufacturers, and consumers.
The most significant impact appears to have been felt at the dealer
level. High-altitude dealers were put at a competitive disadvan-
tage relative to their low-altitude counterparts because of the
1977 regulation. This meant losses in sales and profits, and
an increase cost of doing business. It also meant increased cost
and reduced availability for the high-altitude consumer. Automo-
bile manufacturers' sales generally were not affected by the

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regulations, but they did incur additional costs associated with
the high-altitude equipment and certification.
The beneficiary of the regulations was the general public.
The regulations were in effect only less than one year, so the
improvements in air quality were minor. However, any improvement
in air quality, no matter how small, is beneficial to the health
and well being of the general public.

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CHAPTER V
ECONOMIC IMPACT
This chapter examines the costs of complying with the 1982 and
1983 high-altitude standards. The cost of this regulation, as with
other mobile source regulations, will primarily affect the pro-
ducers and users of high-altitude light-duty vehicles and light-
duty trucks. High-altitude dealers are also affected by these
standards; therefore, the economic impact on their activities is
also addressed in this chapter.
Manufacturers could potentially incur expenses in five major
areas: development, certification, tooling, selective enforcement
auditing (SEA), and hardware. Of course, these costs, as well as
profit, will ultimately be passed along to the vehicle purchaser in
the form of higher sticker prices. In addition, the purchasers or
users of high-altitude vehicles could experience changes in oper-
ating costs because of the regulation. Each of the above cost
elements will be discussed separately in the following sections.
EPA has estimated the emission control requirements and
costs for 1982 and 1983 motor vehicles based on discussions with
manufacturers' representatives, manufacturers' comments on the
proposed rulemaking, confidential 1981 certification data, and
confidential and non-confidential 1980 certification data. In
particular, the cost analysis relies predominately on the 1980
certification data as being indicative of the number of engine
families and their market shares for 1982 and 1983 motor vehicle
fleets. This information was used because it is the most objective
data available. The 1980 data adequately represents the motor
vehicle fleets of the early 1980's because the impact of downsizing
and dieselization for greater fuel economy will not have fully
developed and, hence, will not significantly affect the results of
this analysis.
A. Cost to Manufacturers
Manufacturers will incur costs in two broad categories:
(1) variable and (2) fixed. Variable or recurring costs are
associated with the materials and time it takes to produce each
piece of pollution control hardware. This cost, therefore, depends
on the type of hardware produced. Fixed or non-recurring costs are
generally independent of the number of pieces produced. These
costs include expenditures for development, certification, tooling,
and SEA.
1. Variable Costs - Hardware
As discussed in the Summary and Analysis of Comments, the
emission control technology that manufacturers will use to comply
with the high-alititude standards can be grouped into five generic
emission control systems. Each system is described below.

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a.	Unmodified Electronic Feedback System. Feedback elec-
tronic engine controls are used to continuously optimize engine
parameters (e.g., spark timing, fuel metering, etc.) for various
operating conditions. These systems have the inherent capability
to compensate for the effects of altitude by metering less fuel
into the combustion chambers as the air density changes. EPA has
indent ified at least two types of feedback systems which should be
capable of meeting both the low- and high-altitude standards as
they are currently designed. The first type is the GM "C-4" system
for carbureted engines. This system is currently expected to be
used on all GM and AMC 1982 and 1983 LDVs. The second type is the
Bosch "Jetronic" system for fuel injected vehicles. This system is
used on vehicles manufactured by Nissan, Volkswagen, Volvo, JRT,
BMW, Puegeot, Porsche, Saab, and several other small European
producers.
Vehicles using either the C-4 system or the Bosch Jetronic
system will have no additional hardware costs because no changes
are required.
b.	Recalibrated Feedback Systems. As with other electronic
feedback controls, these systems have the capability to auto-
matically compensate for changes in altitude. However, these
systems are unable to meet the high-altitude standards as origi-
nally designed. They will require additional emission reductions
during the open-loop position of the operating regime. EPA expects
that manufacturers using these systems will meet the high-altitude
standards by using a differently calibrated electronic module on
high-altitude vehicles than on low-altitude vehicles. As stated by
Chrysler, once the specifications have been determined, there is
essentially no difference in manufacturing low-altitude or high-
altitude calibrated units. Therefore, the variable cost of a
high-altitude feedback system is considered to be the same as a
low-altitude feedback system. EPA assumes that special high-
altitude calibrations will be used on all feedback vehicles not
previously identified as using unmodified electronic systems.
c.	Aneroid Non-Feedback Systems. An aneroid is a small
pressure-sensing device that will, be used in conjunction with the
carburetor to automatically lean the fuel-air mixture at higher
altitudes. EPA anticipates that most non-feedback LDVs and LDTs
will use aneroids to comply with the standards. Aneroid equipped
carburetors are currently available on some car/truck models;
other models could easily change to existing aneroid controlled
carburetors; still others could have their existing carburetors
modified by machining in air bleed passages or through simple
modifications to castings. The remaining non-feedback carburetors
could be redesigned to accept aneroids only by more complex changes
to die patterns. This type of change is considered to be a long
leadtime modification and may not be accomplished in time to comply
with the 1982 implementation date of the standard. Therefore,
aneroids can not be used in all cases. In these instances, manu-
facturers will use less complex and less expensive fixed-carburetor

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calibrations for high-altitude vehicles. Rather than attempt to
estimate the number of vehicles using fixed calibrations, EPA will
be conservative and assume that all such vehicles will use a more
expensive aneroid carburetor.
The incremental cost of an aneroid carburetor was estimated
using the data and methodology contained in a cost estimation
report prepared under contract for EPA. This methodology was
altered by: (1) allowing for the effects of inflation, (2) using
an economy of scale correction factor to approximate the low
production volume of high-altitude vehicles and, (3) using more
realistic profit and overhead margins at the corporate and dealer
level. The inflation rate used to escalate prices from the base
year of 1977 to 1980 dollars was 8 percent per annum. The economy
of scale correction factor was 2.6. The overhead and profit margin
used is the same as in the recent heavy-duty vehicles and the
light-duty diesel particulate rulemaking (29 percent). Using this
information, the incremental cost of an aneroid carburetor is
calculated to be about $9.70 for manufacturing and $2.50 for
corporate and dealer profit and overhead, or a total of about
$12.00 per high-altitude vehicle.
d.	Air Injection Non-Feedback System. In their comments on
the high-altitude rulemaking, GM stated that air pumps would be
required on their 2.2 liter, 5.0 liter 2-bbl, and 5.0 liter 4-bbl
LDT engines sold at high altitude in the 1982 model year. In 1983,
these same engine families will already possess air pumps in order
to comply with the more stringent 1983 LDT standards at low-
altitude. Although the Agency can not confirm that air pumps on
these engine families will be required to comply with the 1982
high-altitude standards, EPA will be conservative and account for
this prospect in the analysis. Using the same data and methodology
as described above, but without a correction factor for economy of
scale effects, the incremental cost of an air pump is calculated to
be about $18.70 for manufacturing and $4.90 for corporate and
dealer profit and overhead, or a total of about $24.00 per high-
altitude vehicle. No correction for economy of scale has been
included since GM stated that the air pump is the same as those
currently used on other vehiles and, hence, the benefits of mass
production have already been achieved.
e.	Diesel Engine System. EPA expects that diesel-powered
vehicles can comply with the standards by simple recalibrations of
existing adjustable parameters. No additional hardware, such as an
aneroid, appears to be necessary. Therefore, these vehicles will
have no added hardware costs.
2. Average Hardware Costs
The sales-weighted hardware cost for LDVs and LDTs is cal-
culated in Table V-l. This table includes EPA's estimate of the
number of vehicles using each of the generic control systems
discussed above. These vehicles are not identified by manufacturer

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Table V-l
High-Altitude Hardware Costs
System Variable Cost		Sales-
Vehicle
Total
Fraction
A
B
c
D
E
Weighted
Cumulative
Category
Sales
of Sales
$0
$0
$12
$24
$0
Cost
Cost
LDV
403,000
0.54
X



0


121,000
0.16

X



0


203,000
0.27


X


$3
$3

22,000
0.03




X
0
$3
Subtotal
749,000







$3
LDT
285,000
0.86


X


$10
$10

35,000
0.11



X

$3
$13

10,000
0.03




X
0
$13
Subtotal 330,000
$13

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or engine family in order to protect the confidentiality of the
manufacturers sales projections which are the basis of the esti-
mate. For high-altitude LDVs, the average hardware cost increase
is $3 per vehicle or a total of about $2.2 million. For high-
altitude LDTs, the average hardware cost increase is $13 per
vehicle or a total of about $4.2 million. These figures correspond
to an average high-altitude vehicle cost increase of $6.00 or a
total of about $6.4 million (undiscounted, 1980 dollars).
3. Fixed Costs
a. Developmental Costs. All vehicles except those using
"unmodified electronic feedback systems" will require a unique
calibration for high altitude. Calibrations are historically
developed through a series of reiteration involving theoretical
studies, carburetor flow bench testing, and FTP testing. FTP
testing is by far the most expensive portion of any calibration
effort; therefore, development costs can be adequately charac-
terized by conservatively estimating the average number of FTP
tests required per engine family.
Estimating the number of FTP tests required for compliance
with the standards is problematic. In reality the number is likely
to be different for each engine family because of the variety of
emission control systems and because calibrations within an engine
family will require different degrees of development effort.
The difficulty of estimating the necessary development was not
diminished by manufacturers' comments. Despite the fact that many
manufacturers made repeated claims that high-altitude testing
facilities were inadequate, a statement that should have been based
on an estimate of the requisite development testing, only one
manufacturer provided specific information. Therefore, in order to
estimate the quantity of development testing, EPA relied primarily
on its own experience with development programs at the Motor
Vehicle Emissions Laboratory and on the past experience of its
technical staff while they were employed in development areas of
the automobile industry.
Ford estimated that 52 high-altitude calibrations would be
needed and that 150 FTP tests would be required per calibration.
EPA's independent estimate is in basic agreement with Ford.
Historically, developing a low-altitude * calibration can indeed
take 150 tests. However, it is unlikely that such a great number
of tests would be required to develop a suitable high-altitude
calibration. EPA reasons that calibrating high-altitude hardware
will be less difficult for several reasons.
Typically, low-altitude calibrations are determined simul-
taneously. Such a development program provides no opportunity to
learn from prior experience with similar calibrations within the
same engine family. Because special durability and emission-data
vehicles will not be required, manufacturers will develop high-

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altitude calibrations after the low-altitude hardware has been
determined. The experience and information that were generated in
producing low-altitude calibrations can then be used to reduce the
effort required to develop high-altitude calibrations for the same
vehicle configurations. Also, the overall technical problem is
greatly reduced since the basic changes that must be made to
compensate low-altitude hardware for the effects of higher altitude
are generally well known.
Furthermore, the actual number of calibrations per engine
family may be lower for high-altitude vehicles than for low-
altitude vehicles. Manufacturers may develop many more low-
altitude calibrations than are actually required because the
potential low-altitude market is so great that the resulting small
improvements in driveability and fuel economy (CAFE) justify the
additional development costs. This amount of optimization may not
be needed or justifiable for the smaller high-altitude market,
i.e., one calibration may suffice for several low-altitude calibra-
tions. In this situation the "worst case" calibration for several
vehicle configurations within an engine family will be developed
first, and, if suitable for other similar configurations, will be
used unless time, financial resources, and perceived benefit
dictate otherwise. Even though manufacturers may provide fewer
calibrations and, therefore, less optimization at high altitudes as
compared to low altitude, high-altitude consumers will still
benefit from the development work which will be done. High-
altitude vehicles should perform better and give better fuel
economy than unadjusted low-altitude vehicles operated at high
altitudes with richer fuel-air mixtures.
Although no details were given, Ford may have based their
estimate of 52 high-altitude calibrations on the fact that less
optimization would be required for the high-altitude market than
the low-altitude market. In 1980, Ford certified 20 light-duty
motor vehicle engine families. This figure and Ford's estimate of
high-altitude calibrations translates into about 2.5 calibrations
per engine family. This is in contrast to Ford's 1980 certifica-
tion data which shows an average of perhaps 10 calibrations per
engine family. Therefore, it is reasonable to conclude that Ford
expects significantly less optimization at high altitude than at
low altitude.
i. Light-Duty Gasoline Vehicles. EPA estimates that, on the
average, 100 FTP tests per engine family should be sufficient to
calibrate a light-duty, gasoline-fueled vehicle. This, of course,
assumes that some calibrations will be more difficult to develop
than others and some will be less difficult. It appears that
feedback systems should generally be easier to calibrate than many
non-feedback (aneroid) systems. Additionally, some non-feedback
systems are also expected to be quite easy to calibrate. Manu-
facturers' comments indicated that some vehicles could comply with
the standards by manipulating adjustable parameters on existing
low-altitude hardware. However, to be conservative, EPA will

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use 150 tests per engine family to determine the manufacturer's
development costs due to this regulation. The additional 50 tests
will allow for expenses that are not explicitly accounted for
in this analysis. These expenses include costs for additional
engineering support at the manufacturers' headquarters, building
prototype hardware, and bench testing.
ii.	Light-Duty Diesel Vehicles. As previously discussed in
the section entitled, "Variable Costs - Hardware," EPA expects that
diesel-powered vehicles will comply with the standards by simple
recalibrations of existing adjustable parameters. The testing
requirements for these types of adjustments should be minimal. EPA
estimates that not more than 20 FTP tests will be required to
calibrate a diesel engine family to comply with the high-altitude
standards.
The number of LDV engine families to be certified for 1982 and
1983 is, of course, unkown at this time. EPA has assumed that
approximately the same number engine families will be certified
each year in 1982 and 1983 as was certified in 1980. In 1980 there
were 117 non-California LDV engine families certified. These
include families for sale in either the 49 states, excluding
California, or the 50 states, including California. Engine fami-
lies which are certified for sale in California only have been
excluded because these proposed regulations do not apply to those
vehicles.
There is, of course, the possiblity of carryover of emission
data results from 1982 to 1983, thereby reducing the amount of
development testing required in 1983. However, in order to main-
tain the conservative nature of this analysis, EPA will not account
for this prospect.
iii.	Light-Duty Trucks. EPA estimates that the amount of
testing required to calibrate light-duty trucks in compliance with
the regulations should be approximately the same as for light-duty
vehicles, i.e., 150 FTP tests for LDTs and 20 FTP tests for LDDTs.
Generally, it can be argued that many light-duty truck engine
families have more configurations than a light-duty vehicle engine
family and, therefore, the number of tests should be greater for
LDTs. However, for 1982, the LDT standards are significantly less
stringent than those for LDVs. This means that testing should also
be significantly reduced. Overall, EPA believes that the leniency
of the standards will more than compensate for the additional
calibrations, but, to be conservative, we will use the LDV testing
figures. For 1983, the LDT standards are more stringent than
they are in 1982, but this should not cause the testing require-
ments to exceed 150 and 20 tests for gasoline and diesel trucks,
respectively. Also in relation to the LDV standards, the LDT
standards remain somewhat less stringent. The LDV standards
represent a 90 percent emission reduction from partially con-
trolled vehicles, whereas the 1983 LDT standards represent a 90
percent reduction from uncontrolled vehicles. Because LDVs were

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-51-
already partially controlled their standards are relatively more
stringent. This tends to moderate the LDT requirement in relation
to LDVs. Therefore, EPA believes the LDV testing figures are
adequate for the 1983 LDV calibration effort.
As with LDVs, the number of non-California LDT engine families
to be certified in 1982 and 1983 is unknown at the time of this
writing. In 1980, 39 non-California LDT engine families were
certified and EPA will assume that this many will be certified each
year in 1982 and 1983 as well.
Now that the testing requirement has been estimated, the
price per test remains to be determined before the cost of develop-
ment can be found. Information obtained from commercial testing
facilities located in Denver, Colorado, indicate that a manufac-
turer may run a development quality FTP test for about $375.
Of course, the cost for manufacturers with their own private
facilities will be less. In calculating the cost of develop-
ment, EPA will use $500 per test. This will provide an adequate
allowance for engineering and technical support, and prototype
vehicle shipping expenses.
Table V-2 shows the development costs for the families with
unique high-altitude calibrations. Development costs are estimated
to be $8.9 million for LDVs and $5.5 million for LDTs, or a total
of $14.3 million.
b. Certification. Under the high-altitude certification
rules, manufacturers will be required to certify a high-altitude
counterpart for each low-altitude configuration within an engine
family. EPA has prescribed the high-altitude certification process
in such a manner that the cost of the program is minimized, while
still providing adequate assurance that high-altitude vehicles are
complying with the standards. Manufacturers will not be required
to build and accumulate mileage on special high-altitude certifi-
cation vehicles. Deterioration factors (DF) for high-altitude
vehicles will be the same as those developed with low-altitude,
50,000 mile durability vehicles. In EPA's emission factor program
deterioration rates of in-use vehicles at high and low altitudes
were compared. No statistically significant difference was found
between the vehicles. Therefore, the assignment of high-altitude
DFs based on low-altitude DFs is justified.
Manufacturers will be allowed to use their low-altitude,
4,000-mile data vehicles by modifying these vehicles into the
selected high-altitude configuration. The new selection criteria
requires the manufacturer to choose one emission-data vehicle per
engine family which is expected to have the worst emissions when
tested under high-altitude conditions. This emission-data vehicle
will be one of the emission-data vehicles previously selected for
testing at low altitude. Thus, this regulation will not cause the
manufacturers' to incur the additional cost of building a new
emission-data vehicle and of accumulating 4,000 miles.

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Table V-2
High-Altitude Development Costs

Recalibrated
Total
$
Vehicle Category
Engine Families
Tests 1/
Total 2/
ldv
116
17,400
8,700,000
lddv
16
320
160,000
Subtotal LDV
132
17,720
8,860,000
ldt
72
10,800
5,400,000
LDDT
6
120
60,000
Subtotal LDT
78
10,920
5,460,000
Total
210
28,640
14,320,000
T7 150 and 20 FTP tests for gas and diesel vehicles, respectively.
2/ $500 per FTP development teat.

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-5 3-
The certification costs are estimated to be $842,000. This
includes $631,800 for LDVs and $210,600 for LDTS. As shown in
Table V-3, EPA estimates that 156 engines families will be certi-
fied for high-altitude sales. If a "worst case" is assumed where
manufacturers do not carryover emission data results from year to
year, the maximum possible certification burden will include
testing 156 engine families for each of two years, or a total of
312. The estimated cost per test is $1,800. This figure includes
$1,000 for high-altitude testing and $800 for vehicle transporta-
tion. The estimated testing cost may be high for manufacturers
with their own high-altitude facilities. These manufactuers have
one less profit center to account for than do manufacturers who
contract for certification testing at commercial facilities. EPA
will be conservative however, and not include this potential cost
saving in the analysis.
c. Selective Enforcement Auditing (SEA). The promulgation
of high-altitude standards will not significantly change the costs
of existing SEA test program. First, the high-altitude standards
will not increase the overall number of SEA audits a manufacturer
must perform, assuming that the audited vehicles pass their re-
spective tests. High-altitude audits count toward a manufacturers
annual quota. Therefore, high-altitude audits are merely sub-
stituted for low-altitude audits and do not increase the quota.
Second, as described in the "Summary and Analysis of Comments,"
manufacturers should experience little or no cost increase in
transporting vehicles to SEA test sites or in testing. There-
fore, EPA expects that the additional cost to the industry of
high-altitude SEAs will be insignificant.
4. Total Cost to Manufacturers
As a result of the high-altitude standards, manufactures will
experience increased costs in three main areas: development,
certification, and emission control hardware. These costs are
summarized in Table V-4. The total cost to maufacturers is $11.66
million for LDVs and $9.87 million for LDTs, or a combined total
of $21.53 million (undiscounted, 1980 dollars).
B. Coats to Users of High-Altitude Vehicles
1. First Price Increase
The added cost to manufacturers for development, certifica-
tion, and emission control system hardware will be passed on to
purchasers of high-altitude vehicles. The amount a manufacturer
must increase the price to recover it9 expenses depends on the
timing of the costs and of the revenues from sales, as well as on
the cost of capital to the manufacturer. Table V-G showed the
manner in which the manufacturers' costs are distributed over the
period 1981-1983. The cost of capital is 15 percent per annum and
all fixed costs are recovered by the end of the 1983 model year.
Based on the above information, the average first price increase

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-54-
Table V-3
High-Altitude Certification Costs
$
Vehicle Category
LDV
LDT
Total
Number of	Number of	Number of	$	Total
Families	Tests/Family	Model Years Test	Cost
117	1.5	2	1,800	631,800
39	1.5	2	1,800	210,600
156	842,400

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-55-
Table V-4
Total Cost to Manufacturers
for the 1982 and 1983 Model Years
Development	Certification Hardware
Vehicle Category Year Cost 1/	Cost 1/	Cost 2/	Total
LDV 1981 4.43M	315,900	4.75M
1982	4.43M	315,900	1.1M	5.81M
1983	1.1M	1.1M
Subtotal	8.86M	631,800	2.2M 11.66M
LDT 1981	2.73M	105,300	2.84M
1982	2.73M	105,300	2.1M	4.94M
1983					2.1M	2.1M
Subtotal	5.46M	210,600	4.2M	9.87M
Total	14.32M	842,400	6.4M	21.54M
T7 Fixed costs.
2/ Variable costs.

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-56-
for a high-altitude vehicle is about $23. This is comprised of $16
for development, $1 certification, and $6 for emission control
hardware. This overall average figure represents a $20 increase
for LDVs and a S36 increase for LDTs. Expressed differently, the
coat increase for only those vehicles that require modifications,
i.e., some feedback LDVs, all non-feedback LDVs and all LDTs, is
$42 for LDVs and $36 for LDTs.
2.	Operating Costs
a.	Maintenance. EPA expects no change in the maintenance
costs of high-altitude vehicles. Air pumps and aneroids are the
only additional pieces of hardware that will be required on some
vehicles to comply with the regulations. The remaining vehicles
will not have additional hardware, although some will require
special high-altitude calibrations. Such calibrations should not
change the existing maintenance characteristics of high-altitude
vehicles.
b.	Fuel Economy- The high-altitude standards could poten-
tially affect the fuel economy of low-altitude vehicles and high-
altitude vehicles. With respect to low-altitude vehicles, we are
convinced that these regulations will have no effect whatsoever.
The availability of exemptions for certain low-power vehicles will
enable the manufactuers to market certain high fuel economy vehi-
cles at low altitude that possibly could not certify to the high-
altitude standards. And the revocation of the $40 maximum charge
eliminates the possiblity that a manufacturer would be prohibited
from selling vehicles at low altitude because of an excess cost for
high-altitude modifications.
For high-altitude vehicles, in general, it appears that these
regulations will have a benefical effect on fuel economy. Manu-
facturers are expected to recalibrate many engines to compen-
sate for the effects of high altitude on the combustion process.
In particular, the fuel-air mixture for controlled engines will be
leaner than for uncontrolled engines. The very limited data which
are available to EPA indicated that the benefit for special high-
altitude calibrations might be in the 2 to 3 percent range for
vehicles which presently have no altitude compensation. But many
vehicles already have some type of altitude compensation or else
altitude compensation options, so the fleetwide fuel economy
benefit would be some fraction of the range quoted above. Based on
the very limited data base and the uncertainties involved, EPA will
not enumerate any fuel economy benefit from better high-altitude
emissions performance.
3.	Total Costs to Users
As a result of this regulation, users of high-altitude motor
vehicles can expect to pay an average of $20 more for LDVs and $36
more for LDTs in 1982 than in 1981 (1980 dollars). Stated as a
combined average, the increase for a high-altitude motor vehicle

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would be $23 (1980 dollars). Furthermore, there will be no change
in maintenance costs, but there will be a small positive effect on
fuel economy.
C.	Aggregate Costs.
The aggregate cost to the nation of complying with the 1982
and 1983 high-altitude standards consists of the sum of increased
costs for development, certification, and emission control hard-
ware. These costs occur at different times within the period
1981-1983. Because of the time value of money, these costs can
only be compared by determining their present value in some base
year. For this analysis, the base year is arbitrarily chosen as
the implementation date of the standard, 1982. A discount rate of
10 percent is used to approximate the social cost of capital.
The present value of the costs of this regulation are shown in
Table V-5. The aggregate cost of $22.03 million is equivalent to a
lump sum investment made at the beginning of 1982.
D.	Socio-Economic Impact
1. Impacts on Manufacturers
a. Capital Expenses. Capital expenditures (fixed costs) are
basically equal for each of the two years the standard is in effect
Table V-5). Since the analysis assumes a "worst case" where there
is no carryover of emission data results from 1982 to 1983, each
year's investment must basically be recouped through each year's
sales. Because the capital expenditure at the beginning of each of
the two years is the same, the real burden of the standard can be
viewed as raising the first year's fixed costs before vehicle sales
begin to repay the investment.
The first year's fixed cost, or investment, is calculated to
be $8.8 million. This cost is based on the assumption that every
engine family a manufacturer sells at low altitude will be properly
developed and certified for sale at high altitude as proscribed by
the regulations. Furthermore, a capital cost for the industry of
15 percent was used in the analysis.
The capital requirements for some manufacturers will be
greater than for others. The $8.8 million investment will be
incurred primarily by manufacturers whose vehicles will require
modification and, therefore, development testing to meet the
standards. The investment cost for development testing can be
apportioned to manufacturers as shown in Table V-6, based on their
1980 engine families.
Manufacturers should have little trouble financing the re-
quired investment. The investments are small when compared to the
total capital requirements of the manufacturers in this period.

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Table V-5
Aggregate Cost to the Nation for
1982 and 1983 High-Altitude Standards 1/
Year
Development
Cost 2/
Certification
Cost 2/
Hardware
Cost 3/
Total
Discount
Factor
Discounted
Total
1981
1982
1983
7.16M
7.16M
421,200
421,200
3.2M
3.2M
7.58M
10.78M
3.2M
1.10
0.00
0.91
8.34M
10.78M
2.91H
Total
22.03M
If Present value in 1982, 1980 dollars, 10 percent discount rate.
2/ Fixed cost.
3/ Variable cost.

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-59-
Table V-6
Manufacturers Expenditures
for the High-Altitude Standards
$
Manufacturer	Investment (thousands) IJ
Alfa Romeo	180
AMC	540
Aston Martin	90
Audi	30
Avanti	90
BMW	90
Jaguar/Rover/Triumph	450
Checker	270
Chrysler	890
Fiat	180
Ford 1790
Fuji	270
GM	470
Honda	180
Lotus	180
Maserati	90
Mercedes	50
Mitsubishi	450
Nissan	360
Peugeot	20
Porsche	10
Renault	90
Rolls Royce	90
Saab	10
Toyo Kogyo	450
Toyota	720
Volkswagen	310
Volvo	20
IHC	270
Isuzu	90
Suzuki	90
77 Investment to meet the standards including a 15 percent
capital cost.

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-60-
b. Effects on the Demand for High-Altitude Vehicles. The
average coat increase per high-altitude vehicle is estimated to be
$23. This assumes that manufacturers will assign additional costs
incurred solely to the high-altitude vehicles. However, it is
possible that the costs of the high-altitude standards will be
spread partly or entirely across the national market. This could
significantly reduce the cost of high-altitude vehicles but would
slightly increase the cost for all other vehicles. For example,
spreading the costs over the national market would increase the
cost of the average vehicle by about $1.
The impact of sales can be estimated by using the higher
estimate of $23 per high-altitude vehicle. The average vehicle
cost in 1982 and 1983 is assumed to be roughly $7,000, the cost of
these standards represent a 0.3 percent increase. This can be used
in conjunction with the following equation to estimate the impact
on sales.
% in vehicle sales * [price elasticity][.5 (% change in vehicle price)]
Assuming the estimated 1982 and 1983 price elasticity for
vehicles is 0.35 and that high-altitude total 1.1 million, the
impact of this regulation will be to reduce vehicle demand by about
580 over the two year period, or less than one tenth of one
percent of the total projected sales for the nation. Sales by some
small manufacturers may decline more than those of larger manufac-
turers due to their reduced sales volume over which the development
and certification can be amortized. However, the very small
decrease in total industry sales, due to these regulations, will be
more than overcome by normal sales growth. For this reason, the
regulation is expected to have no noticeable effect or any single
manufacturer's sales.
It is not expected that the promulgation of the regulation
will have any impact on employment or productivity in the industry.
2. Impact on High-Altitude Dealers
The potential economic impact of these standards on dealer-
ships can be divided into two general areas: reduced model availa-
bility and higher vehicle prices. Adverse changes in either area
could affect vehicle sales and, hence, dealership profitability.
a. Model Availability. As previously discussed in Chapter
IV, the 1977 high-altitude regulation's resulted in the unavaila-
bility of many models and optional engine configurations in high-
altitude areas. Manufacturers chose to limit model availability in
high-altitude because the small percentage of the market repre-
sented by high-altitude sales (about four percent) did not justify
the development costs required to certify the emission control
capabilities of all their vehicle configurations. Some high-
altitude dealers alleged that this resulted in lost sales.

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To avoid model availability problems with the 1982/1983
interim regulations, EPA will require that all models, regardless
of where they are to be sold, shall meet, or shall be capable of
being modified to meet, the high-altitude standards. Since almost
all new vehicles will be certified for sale at high altitude, each
manufacturer will be more likely to make its full product line
available to high-altitude purchasers. Conceivably, a manufacturer
might comply with the regulations by certifying all models for high
altitude sale but choose not to offer certain models to high-
altitude purchasers. The Agency believes, however, that manufact-
urers will make almost all models available once those models have
been certified. An exception might involve certain low-power
vehicles which perform poorly at high-altitude. Because the sale
of such vehicles at high altitude would be unlikely, EPA has
developed exemption criteria to certify them for principal use at
low altitude. Furthermore, although 1982 LDTs will be given a 30
percent sales-based exemption because of leadtime considerations,
these exempted vehicles may be offered for sale at high altitude.
Thus, model availability at low altitudes should be ensured, while
model availability at high altitudes will be maximized.
We believe that this control strategy, combined with manufact-
urers' increased experience with altitude-compensating emission
control system, will keep availability problems well below the 1977
level. Thus, the overall economic impact of the interim high-
altitude regulations should be minimal.
b. Higher Vehicle Prices. The incremental cost of a high-
altitude vehicle depends on whether the dealer acquires the new
vehicle by ordering it as original equipment from the factory or
through a "dealer trade" with a low-altitude dealer. Some low-
altitude vehicles acquired in dealer trades must be modified into
the proper high-altitude configuration before they are sold.
The cost of factory built high-altitude vehicles depends on
the manufacturers pricing strategy. If manufacturers choose to
amortize the cost of this regulation across their national pro-
duction, the average vehicle increase would be less than $1. This
is indeed more than an interesting possibility, since it is likely
that, at a minimum, manufacturers may recover at least some high-
altitude costs through national sales. The largest single cost of
this regulation is for development. Often times such non-recurring
costs are pooled and then amortized across a manufacturers product
line as the anticipated market and other variables, including
competition, permit. Although the high-altitude market represents
only a small percentage of total sales, this small amount may be
more significant for manufacturers during their ascent from recent
economic difficulties and as the entire market shifts to more
competitive smaller cars than was the case in 1977 model year.
Therefore, competition for high-altitude sales among manufacturers
could be quite intense. Additionally, the industry's historical
price leader, General Motors, will incur very little additional
cost because of this regulation and will not require any signifi-
cant cost increase even if all costs were recovered through high-

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altitude sale9. This is most true for GM's LDVs. Therefore,
because of competition with such companies as GM, other manufac-
turers may indeed raise high-altitude vehicle prices very little if
at all in order to remain competitive.
If manufacturers do choose to recover their costs only on
high-altitude sales, the estimated price increase for the average
LDV is about $20 and for a LDT is about $36. The overall average
will be about $23 per high-altitude vehicle. This represents
approximately 290 lost sales per year, or 580 over the two year
life of the standards. As stated in Chapter IV, there are about
1,000 high-altitude dealerships. However, only those dealers
representing manufacturers whose vehicles must be recalibrated to
meet the high-altitude standards will be impacted by signifi-
cantly higher vehicle prices. As previously discussed in this
chapter, the manufacturers building LDVs that generally will not
require recalibration are GM, AMC, Nissan, Volkswagen, Volvo, JRT,
BMW, Peugeot, Porsche, and Saab. The actual number of high-
altitude dealers selling recalibrated vehicles is not readily
available. Nevertheless, it is possible to reasonably estimate
the number of high-altitude dealerships selling vehicles with
significantly higher prices ($42 and $36 for recalibrated LDVs and
LDTs, respectively), based on the national fraction of dealer
outlets representing manufacturers which build recalibrated LDVs.
Using this analogy, EPA estimates that 50 percent of the 1000
high-altitude dealers may be impact by significant first price
increases. If equally impacted, each of these 500 dealerships
would lose about one sale during the two year period. Therefore,
the potential price increase for original equipment vehicles should
have no significant economic impact on individual high-altitude
dealerships.
In some cases, dealer trades may be adversely affected
by the interim high-altitude standards. The impact on sales,
however, remains conjecture. Dealer trades generally involve
small rural dealers who cannot stock a wide variety of vehicles
and must trade with large metropolitan area dealers to satisfy
customer demand. Dealer trades were estimated by the Colorado
Automobile Dealers Association to involve from 10 to 15 percent
of sales by small rural dealers. Therefore, the potential im-
pact will predominately apply to high-altitude dealerships which
are isolated from high-altitude metropolitan areas. EPA is
unable to estimate the number of such isolated dealerships,
but believes it is reasonable to postulate that the number is
relatively small since most high-altitude areas are within "trad-
ing" distance (a few hundred miles) of a high-altitude metropolitan
area. Also not all manufacturers will have special high-altitude
vehicles, so some dealers should not have any problem. Neverthe-
less, even though the number of high-altitude dealerships which pay
trade with low-altitude metropolitan dealerships may be relatively
small, the potential impact on these dealers needs to be explored
further.

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First, while all LDTs may have special high-altitude emission
controls, approximately one half of the LDVs sold will not require
such special controls. The LDVs which do not need special controls
will be identical to their low-altitude counterparts, as is cur-
rently the case; therefore, there is no potential to interfere with
trading these vehicles between dealerships. The remaining vehicles
should be available from the factory, so dealers will have access
to all high-altitude models. But, if models are available from the
factory, why be concerned about dealer trades at all?
High-altitude dealers have stated that their primary con-
cern is being able to obtain vehicles that are in high demand.
Apparently, in 1977 when most vehicles involved factory installed
high-altitude modifications, there were sometimes long delays in
obtaining vehicles and sales were lost. EPA has addressed this
problem by requiring all vehicles that don't automatically comply
with the standards, to be capable of being modifiable to do so.
This will help ensure that the small number of isolated, rural
dealerships which trade with low-altitude dealers can obtain
vehicles on a timely basis and modify them into the proper con-
figuration before sale. The only potential barrier could be that
the modification might be expensive. The Colorado Automobile
Dealers Association estimated that modifications costing perhaps up
to $150 per vehicle would not affect sales. As discussed in the
Summary and Analysis of Comments, EPA expects many vehicles will be
modifiable for less than that amount. Since dealer trades appear
to be most critical for high demand vehicles for which long
ordering delays may be experienced, the real potential impact of
the high-altitude standards is whether or not dealers will lose
sales for those few vehicles that are in high demand and are
expensive to modify.
Assuming that by the time a prospective customer contacts a
dealerships the customer has previously decided that a specific
new car is necessary and that a substitute, i.e., one that is more
available, is not suitable, there are two fundamental problems in
the "worst case". First, the vehicle of choice must be ordered
from the factory but there will be a delay. Second, the vehicle of
choice may be available sooner but must be modified at an extra
cost of a few hundred dollars.
Since it will be illegal for a prospective customer to pur-
chase a low-altitude vehicle elsewhere, a decision based primarily
on economics must be made, i.e., is it worth the extra cost to have
the specific vehicle sooner, or is it better to wait and, in the
process, save money. No matter which choice is made, the sale is
not lost in this example.
Of course, a prospective customer may not have previously
decided on a particular high demand vehicle that is in short
supply. If this is the case he may shift to another more avail"
able, vehicle from the same manufacturer. In this case the sale
would not be lost. The customer may also decide to purchase a

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comparable vehicle from another dealer. In this case the potential
sale would be lost. Or, the customer may have only been marginally
interested in the particular "problem" vehicle and decides not to
buy any vehicle. In this case the potential sale would also be
lost.
In summary, the regulations should not significantly affect
overall high-altitude sales. The potential for adversely affecting
sales is limited to relatively isolated, rural high-altitude
dealerships which must "modify" low-altitude vehicles acquired in
dealer trades with low-altitude dealerships. For these isolated
dealers, the potential problem should be limited to the relatively
few "high demand" vehicles which are expensive to modify into the
proper high-altitude configuration. Even in these instances,
however, only a portion of such potential sales would be lost.
Therefore, it is reasonable to assume that any single high-altitude
dealership will not be greatly affected by high-altitude standards.
3. Impact on User
Users will be affected by higher new vehicle purchase prices.
The averge price increase of $23, $20 per LDV and $36 per LDT
should not substantially impact the owner's ability to pay for new
vehicles. These standards should cause no increase in fuel or
maintenance costs.

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CHAPTER VI
COST EFFECTIVENESS
Cost effectiveness is a measure of what might be termed the
economic efficiency of some action directed toward achieving some
goal. Expressed as cost per unit of benefit achieved, cost effec-
tiveness can be used to compare various alternative methods of
achieving the same goal. In the context of improving air quality,
the goal is to reduce emissions of harmful pollutants, and cost
effectiveness is expressed in terms of the dollar cost per ton of
pollutant controlled.
To evaluate cost effectiveness, two pieces of information on
the alternative being evaluated are needed. These are the cost of
the alternative and the benefits to be gained. The costs used in
this chapter will be the total aggregate cost to the nation,
discounted to the implementation date of the standards. These
costs will be allocated equally between the pollutants being
controlled. The benefits will be the total lifetime emission
reductions resulting from the standard. The resulting cost effec-
tiveness value will then be compared to other control strategies to
determine its relative cost efficiency.
Table VI-1 summarizes the total pollutant reductions, total
cost, and cost effectiveness of the interim high-altitude stan-
dards. These cost effectiveness values of $330 per ton of HC and
$10 per ton of CO compare favorably to the values for other emis-
sion control strategies. As shown in Table VI-2, the values for
these other strategies range up to about $1,000 per ton of HC and
$50 per ton of CO.

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Table VI-1
Cost Effectiveness for the High-Altitude Control Strategies
Cost
Reductions^/	Cost2/	Effectiveness
Pollutant (thousands of tons) (million dollars) (dollar/ton)
HC	33	11.02	330
CO	1,195	11.02	10
l7From Table III-ll, divided equally between the pollutants.
2/ From Table V-5, divided equally between the pollutants.

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Table VI-2
Cost Effectiveness for Other Control Strategies
Control Strategy
Degreasing 0-48%
Gravure 0-98%
Gas Terminal 0-67%
Miscellaneous Chemicals 0-35%
Dry Cleaning 0-80%
GHDV Evap. 5.8-0.5 g/mi.
Degreasing 41-90%
Industrial Finishing 76-97%
Gasoline Handling 16-50%
Miscellaneous Chemicals 35-53%
Gasoline Distributions 67-99%
Coke Ovens 0-80%
LDV Exhaust 0.9-0.41 g/mi.
Gas Handling 51-91%
GHDV 90% of Baseline
DHDV 90% of Baseline
LDV I/M
LDT 1.7-0.8 g/mi.
Motorcycles 9 to 8-22.5 g/mi.
Motorcycles 34.67-27.4 g/mi.
LDV 15-3.4
Cost Effectiveness ($/t)
CO
HC
-230
1
-60
1
0
1
0
1
10
1
20
1
100
1
110
1
110
1
220
1
300
T
490
1
530
1
780
1
300
4
162
4
955
5
139-201
6
420
7
2/
3/
8 4/
49 5/
neg. JJ
48 If
V U. S. DOT (1976)
2J A more recent EPA analysis,
be published as a proposal,
$70 to $250 per ton (yet to
3/ Agrees reasonably well with
be released).
4/ U. S. EPA (1978b).
T/ O'Rourke (1979).
6/ U. S. EPA (1979).
7/ U. S. EPA (1976).
which supports a regulation yet to
yields numbers in the range of
be released).
a more recent EPA analysis (yet to

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CHAPTER VII
ALTERNATIVES
The following alternatives are analyzed in this impact state-
ment .
1.	Take no further action.
2.	Reinstate the 1977 model year requirements with new
emission standards.
3.	Require that all vehicles meet high-altitude emission
standards at high altitude and low-altitude standards at
low altitude.
4.	Require all vehicles to meet emission standards at
the altitude at which they are sold, and to be capable
of being modified to meet standards at other altitudes.
5.	Implement standards as in number 4 above, but promulgate
the less stringent standards that were recommended by the
Motor Vehicle Manufacturers Association.
A. No Action
The Clean Air Act does not require that the Environmental
Protection Agency establish high-altitude standards until the
1984 model year. High-altitude standards may be established
no earlier than the 1981 model year, and only after the impacts
addressed in this document justify the standards.
As shown in this document, the air quality impact of the
1982 through 1983 high-altitude emission standards will be sig-
nificant and the economic impact will be acceptable. EPA has
identified 13 areas as not attaining the national ambient air
quality standards for carbon monoxide or photochemical oxidants
which are above 4,000 feet in elevation (see Table VII-1).
The Clean Air Act requires that the states provide for the im-
plementation of all reasonably available control measures as
expeditiously as is practical in such areas. Considering the
severity of the air quality problems in high-altitude cities, EPA
would be remiss if it did not promulgate high-altitude standards
for the 1982 and 1983 model years.
Inspection/Maintenance (I/M) and implementation of Section 215
of the Clean Air Act, High Altitude Performance Adjustments, would
help to offset the adverse air quality impacts of the no action
alternative, but a much greater positive impact will be achieved if
high-altitude emission standards are implemented in addition to
both of these programs. Section 215 regulations have several
problems:

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Environment Affected:
Table VII-1
High-Altitude Nonattainment Areas
Area
Tahoe Air Basin
(California, Nevada)
Fort Collins, Colorado
Greeley, Colorado
Denver, Colorado
Colorado Springs, Colorado
Reno, Nevada
Ely, Nevada
Albuquerque, New Mexico
Famington, New Mexico
Salt Lake City, Utah
Bountiful, Utah
Ogden, Utah
Provo, Utah
Pollutants
CO, Ox
CO, Ox
CO, Ox, N02
CO, Ox
CO, Ox
Ox
CO, Ox
CO
CO, Ox
CO, Ox
CO, Ox
CO, Ox
Alt itude
Meters
Feet
1,897 6,225
1,421
1,519
1,609
1,832
1,368
1,957
1,507
1,200+
1,338
1,338
1,309
1,387
4,663
4,984
5,280
6,012
4,490
6,421
4,945
4,000+
4,390
4,390
4,295
4,550

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1.	They would not achieve the same degree of per vehicle
emission reduction as standards.
2.	They would only require that adjustments be available,
not that adjustments actually be made.
B.	Separate High-Altitude Vehicles
Under this alternative, only vehicles initially sold for use
at high altitude would meet or be capable of meeting the high-
altitude standards. During the 1977 model year, when this approach
was used, the manufacturers typically certified for sale at high
altitude only high volume models and options. Many more fuel
efficient, though less popular options were not made available,
such as vehicles with manual transmissions and lower numerical axle
ratios.
The result of the limited availability of different models and
options was that at least some consumers purchased low-altitude
vehicles, adversely affecting both air quality and high-altitude
automobile dealers. A vehicle purchased at low altitude, and taken
to high altitude could not be easily modified to meet emission
standards. This presents a serious shortcoming in our mobile
society, particularly in a high growth area such as Denver, Colora-
do.
The adverse impacts of the 1977 model year high-altitude
regulation on high-altitude consumers and dealers caused Congress
to withdraw that requirement for future model years. The adverse
impact on consumers and dealers, and the adverse impact on air
quality which would be caused by low-altitude vehicles which have
been moved to high altitude, removes this alternative from consid-
eration for the 1982 and 1983 high-altitude standards. These
adverse impacts are discussed in more detail in Chapter IV.
C.	All Vehicles Meet High- and Low-Altitude Standards
This alternative would impose a similar requirement as in the
1984 model year when all vehicles must meet the statutory emission
levels regardless of the altitude at which they are sold (206(f) of
the Clean Air Act). The only difference between this alternative
and the 1984 requirement would be in the stringency of the emission
standard at high altitude.
This alternative would have the greatest effect on air quality
of any of the alternatives. All vehicles would have to be equipped
with devices which would automatically compensate for altitude,
regardless of whether they would ever be used at high altitude.
The added cost of equipping all vehicles with altitude compensation
devices would make this option more expensive than requiring all
car to be capable of being modified to meet the standards if they
don't already do so. The increased effectiveness of this option
would be that transient low-altitude vehicles operating at high

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altitudes would meet the emission standards. If low-altitude
residents permanently move to high-altitude areas, their cars would
also meet the emission standards. However, high air pollution
values are largely the result of rush hour traffic, which is
overwhelmingly resident vehicles, so the air quality benefit of
compensating such vehicles would be expected to fairly small.
Another potential benefit of this alternative is that there should
be absolutely no interference with either dealer trades or model
availability because all vehicles will be originally built to meet
both standards.
The alternative of requiring all vehicles to meet high-
altitude standards at high altitude and low-altitude standards at
low altitude is rejected for this two year standard because the
leadtime necessary to implement such a control strategy is not
available and because the air quality benefits are low relative to
the increased cost.
D. Vehicles Modifiable to Meet High- or Low-Altitude Standards —
Proposed Action by EPA
This alternative would require that vehicles offered for
initial sale for use at high altitudes meet emission standards at
that altitude. It would also require that a vehicle sold for
initial use at low altitude would be capable of being modified to
meet standards at high altitudes. Vehicles offered for sale would
have both a high-altitude and low-altitude configuration. All
vehicles could be sold at either altitude as long as they are
equipped with the modification applicable for the altitude of
principal use. The modification would be required to be capable of
being applied in the field (e.g., by the dealer), but could also be
applied by the manufacturer prior to shipping. It would be the
responsibility of the manufacturer that vehicles (properly main-
tained, operated, and equipped with the proper altitude modifi-
cation) meet emission standards at any altitude over a specified
range.
Vehicles sold at altitudes below 1219 meters (4000 feet) must
comply with the low-altitude standards presently specified in 40
CFR Part 86. Vehicles sold above 1219 meters (4000 feet) must be
capable of complying with high-altitude standards when tested at
a reference point of 1,650 meters (5,400 feet). At the 1,650 meter
reference point, the LDV high-altitude standards are 0.57 grams per
mile HC, 7.8 grams per mile CO, and 1.3 times the low-altitude
standards for evaporative emissions. The low-altitude oxides of
nitrogen (NOx) standard applies at all altitudes.
Vehicle model availability will not be affected by this
alternative. Vehicle models and options for sale at sea level will
also be available at high altitude. Dealers at high altitude will
be able to trade with dealers at low altitude for models they do
not have in stock, as long as they equip the vehicle with the
proper modification prior to sale.

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Only those vehicles sold for use at high altitude will
need to be built initially as high-altitude vehicles. This
will greatly lower the economic impact of the high-altitude
standards, since 96 percent of national sales will not be built as
high-altitude configurations. Without a program such as State
Inspection/Maintenance (I/M) there will be no requirement for
vehicles moving from low to high altitude to be properly equipped.
However, a State I/M program is necessary to insure that in-use
vehicles continue to meet emission standards even at low altitude.
Most high-altitude areas with severe CO or oxidant problems (all
those with populations in excess of 200,000 not attaining standards
by 1982) are required to have I/M programs by the Clean Air Act
anyway.
Beginning with model year 1981, it is expected that 70 percent
of the light-duty vehicles produced will have three-way feedback
type emission control systems. These systems will have the inher-
ent capability to automatically adjust for changes in air density
with altitude. In some cases, the three-way systems will be
capable of operation at the desired high-altitude emission levels
without any changes in the emission control system. In other
cases, a special high-altitude calibration may be required for
vehicles sold at high altitude. The remaining 30 percent of the
light-duty vehicles, with non-three-way type emission control
systems, will be amendable to altitude compensation with the
addition of special modifications such as aneroid-type devices or
recalibrated carburetors. All light-duty trucks are expected to
require the addition of compensation devices. Manufacturers would
also automatically comply with the requirements of Section 215 of
the Clean Air Act, (ie., high-altitude performance adjustments)
through this option. This option also represents a reasonable
interim program in preparation for the requirements which start
with the 1984 model year under Section 206(f) of the Clean Air Act,
when all vehicles must meet emission standards regardless of the
altitude at which they are sold.
E. Vehicles Modifiable to Meet High- or Low-Altitude Standards -
Proposed Action or MVMA
In response to EPA's proposed high-altitude regulations,
the Motor Vehicle Manufacturers Association (MVMA) recommended
an alternate technique for deriving the levels of the high-altitude
standards. MVMA stated that their approach was more valid than
that used by EPA. In analyzing the MVMA comments,1/ the Agency
concluded that although both approachs to defining the standards
were valid, EPA's methodology was preferred. Since MVMA's method-
ology can also be considered to be conceptually valid, their
suggested standards should be considered as an alternative.
MVMA and EPA standards are compared in Tables VII-2 and
VII-3. In relation to the EPA standards, MVMA standards would be
less expensive and provide a smaller benefit. However, the cost
reduction is not as great as the reduction in benefits; hence, the

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MVMA standards are not as cost effective as the EPA standards.
Especially troubling is the very low reduction in CO emissions
which is the major pollutant in high-altitude areas. This causes
the cost of reducing one ton of CO emissions with the MVMA standard
to be 18 times as expensive as with the EPA standards.
The low reduction in CO emissions is primarily caused by the
MVMA standard for 1982 LDTs. As shown in Table VII-3, this alter-
native standard is, in effect, no standard at all. In the 1982
model year LDTs would actually be allowed to pollute more at high
altitude then if there was no "standard" (i.e., about 10 grams/mile
more). This, of course, cannot be tolerated by EPA. It is also
very unlikely that manufacturers would produce special vehicles
that pollute more at high altitude. Nevertheless, there would
certainly be no reduction in CO emissions and only a miniscule
reduction in HC emissions at high altitude (Table VII-3). Cur-
rently, this situation would occur in the 1982 model year only;
however, if the 1983 LDT low-altitude standards are postponed until
1984, there would be effectively no regulation of LDT emissions at
altitude for either the 1982 or 1983 model years.
The MVMA alternative standards should not be promulgated in
place of EPA's standards because the lower cost of the standards is
not justified by the small overall reduction in emissions that
would result. In particular, the MVMA LDT standard for 1982 would
provide little or no emissions reduction at high altitude. EPA
standards effectively control high-altitude emissions and, while
more expensive, they are more cost effective, i.e., a lower cost
per ton of pollutant reduced.

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References
"Summary and Analysis of Comments to the NPRM: High-Altitude
Emission Standards for 1982 and 1983 Model Year Light-Duty
Motor Vehicles." EPA. OANR. OMSAPC. 1980.

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Table VII-2
Comparison of MVMA Standards v. EPA Standards
EPA
MVMA
LDV Std
HC
.57
CO
7.8
.64 10.7
LDT Std
HC
2.0
2.7
CO
26
57
Total
_J	
22.54M
11.44M
Emission Reductions
HC
CO
33K 1,195K
19.8K 340K
Cost
Effectiveness
HC
330
310
CO
10
180
Table VII-3
% Reduction in Lifetime Emission Rates — MVMA v. EPA
LDV	LDT
HC CO	HC CO
EPA	9.5 17.1	9.8 23.8
MVMA	8.2 11.8	0.7 -10.4

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